Test your basic knowledge |

Venture Capital

Subject : industries
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Money used to purchase equity-based interest in a new or existing company. A venture capitalists return usually comes from preferred stock - a share of profits - royalties or capital appreciation of common stock. Most venture capitalists look for c






2. Compound internal rate of return.






3. A type of equity ownership in a corporation - stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights.






4. Purchase of a business by an outside team of managers who have found financial backers and plan to manage the business actively themselves.






5. Cash - stock and other property by the company to the investor in the investor's capacity as a stock - payment to owner for their appreciation






6. The valuation of a company prior to a round of investment. This amount is determined by using various calculation models - such as discounted P/E ratios multiplied by periodic earnings or a multiple times a future cash flow discounted to a present c






7. This refers to obtaining capital from investors or venture capital sources.






8. A limited amount of equity or short-term debt financing typically raised within 6-18 months of an anticipated public offering or private placement meant to 'bridge' a company to the next round of financing.






9. The total value of the company immediately prior to the latest round of financing






10. Partner who does not share in a firm's management and is liable for its debts only to the limits of said partner's investment






11. Issue of shares of a company to the public by the company (directly) for the first time.






12. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything






13. Corporation's first offer to sell stock to the public - Allows for anyone to buy stock and now falls under the SEC (No longer accredited investor) ...






14. It refers mainly to insurance companies - pension funds and investment companies collecting savings and supplying funds to markets - but also to other types of institutional wealth (e.g. endowments funds - foundations etc.).






15. The equity ownership in a corporation. Also has basic voting rights






16. Funds provided to enable operating management to acquire a product line or business - which may be at any stage of development - from either a public or private company.






17. How you get to vote






18. The act of one company taking over controlling interest in another company. Investors often look for companies that are likely candidates for this - because the acquiring firms are often willing to pay a premium to the market price for the shares.






19. The repurchasing of all of a company's outstanding stock by employees or a private investor. As a result of such an initiative - the company stops being publicly traded. Sometimes - the company might have to take on significant debt to finance the






20. The sale or distribution of a stock of a portfolio company to the public for the first time. IPOs are often an opportunity for the existing investors (often venture capitalists) to receive significant returns on their original investment. During peri






21. Assets are subject to double taxation - Unlimited number of investors






22. The first round of stock offered during the seed or early stage round by a portfolio company to the venture investor or fund. This stock is convertible into common stock in certain cases such as an IPO or the sale of the company. Later rounds of pref






23. The maximum amount of cash that a partner is required to contribute under the terms






24. The practice of a large company taking a minority equity position in a smaller company in a related field.






25. The sale or exchange of a significant amount of company ownership for cash - debt - or equity of another company.






26. These are short-term financing agreements that fund a company's operation until it can arrange a more comprehensive longer-term financing. The need for these arises when a company runs out of cash before it can obtain more capital investment though l






27. Investments by a private equity fund in a publicly traded company - usually at a discount.






28. The way you buy stock






29. These are equity securities of companies that have not 'gone public' (in other words - companies that have not listed their stock on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are no






30. A security with limits on its transferability. Usually issued in connection with a private placement






31. When an investor sells a stock - bond or mutual fund at a higher price than he or she paid for it.






32. A form of equity ownership in a corporation that contains preferences over common stock - stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights






33. Also called a 'Cap Table' - this is a table showing the total amount of the various securities issued by a firm. This typically includes the amount of investment obtained from each source and the securities distributed -- e.g. common and preferred s






34. A brief statement covering the main points that includes a discussion of management - profits - strategic position - and exit plan






35. The process whereby a group of venture capitalists will each put in a portion of the amount of money needed to finance a small business.






36. The amount of common shares of a corporation which are in the hands of investors. It is equal to the amount of issued shares less treasury stock.






37. An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.






38. The rate of return or profit that an investment is expected to earn.






39. The first round of capital for a start-up business. Seed money usually takes the structure of a loan or an investment in preferred stock or convertible bonds - although sometimes it is common stock. Seed money provides startup companies with the cap






40. How fast you can turn it into cash - termination of a business operation by using its assets to discharge its liabilities






41. Selling an interest in your business to an outside party to raise money.






42. Don't talk to the market about the company






43. The valuation of a company immediately after the most recent round of financing. For example - a venture capitalist may invest $3.5 million in a company valued at $2 million 'pre-money' (before the investment was made). As a result - the startup will






44. The total dollar value of all outstanding shares. Computed as shares multiplied by current price per share. Prior to an IPO - market capitalization is arrived at by estimating a company's future growth and by comparing a company with similar public






45. Cannot get other outside investors-No Shop






46. How much the company is worth before an investment






47. The company or entity into which a fund invests directly.






48. A request from the GPs requiring each limited partner to deliver a portion of their capital commitment. Usually specified as a percentage of the capital commitment

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


49. This word is used to describe businesses that are in trouble and whose management will cause the business to become profitable so they are no longer in trouble.






50. Capital raised for a private company from independently wealthy investors. This capital is generally used as seed financing.