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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. 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






2. These are lending and investment firms that are licensed by the federal government. The licensing enables them to borrow from the federal government to supplement the private funds of their investors. Some of these funds engage only in making loans t






3. How you get out






4. A business owned by stockholders who share in its profits but are not personally responsible for its debts






5. A class of capital stock that may pay dividends at a specified rate and that has priority over common stock in the payment of dividends and the liquidation of assets. Many venture capital investments use preferred stock as their investment vehicle. T






6. A financial institution specializing in the provision of equity and other forms of long-term capital to enterprises - usually to firms with a limited track record but with the expectation of substantial growth. The venture capitalist may provide bot






7. 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






8. An acquisition of a business using mostly debt and a small amount of equity. The debt is secured by the assets of the business.






9. 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






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






11. 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.






12. 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






13. The way you buy stock






14. 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






15. 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.






16. 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.






17. Money that business owners must pay back with interest. There are myriad types of these - from simple commercial loans to bridge/swing loans in which a lender makes a short-term loan in anticipation of equity financing at a later stage in the develo






18. 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.






19. Term sheet for equity offering






20. Used to compute net worth as the difference between total assets and total liabilities. adjusted value up to reflect market value






21. 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






22. The legal structure used by most venture and private equity funds. Usually fixed life investment vehicles. The general partner or management firm manages the partnership using policy laid down in a partnership agreement. The agreement also covers -






23. 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






24. 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


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






26. This refers to a synopsis of the key points of a business plan.






27. An extremely concise presentation of an entrepreneur's idea - business model - company solution - marketing strategy - and competition delivered to potential investors. Should not last more than a few minutes - or the duration of an elevator rid






28. No double tax - Limited number of investors






29. Force sell of stock at a predetermined price. The rights by which the investor's preferred stock or subordinated debt 'converts' into common stock






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






31. The rate at which a company expends net cash over a certain period - usually a month.






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






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






34. The internal rate of return on an investment.






35. Also known as a bell cow investor. Member of a syndicate of private equity investors holding the largest stake - in charge of arranging the financing and most actively involved in the overall project






36. 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) ...






37. 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






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






39. These are government-chartered venture firms that can invest only in companies that are at least 51 percent owned by members of a minority group or person recognized by the rules that govern this to be economically disadvantaged.






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






41. 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.






42. A detailed document that outlines what you are going to do and how you are going to do it - including a clear and simple discussion of the idea; the management team - including full resumes; business strategy; marketing plan - including sales projec






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






44. The equity ownership in a LLC. May be either common or preferred. Partnership agreement






45. 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.).






46. The party that manages a limited partnership and is liable for the debts of the company






47. Date the LP's subscription is effective and they become partner






48. Equity securities of companies that have not 'gone public' (are not listed on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are not listed on an exchange - any investor wishing to sell






49. The value at which an asset is carried on a balance sheet (the cost of the item)






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