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Venture Capital

Subject : industries
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. 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.






2. Funds provided to enable an enterprise to acquire another enterprise or product line or business.






3. 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.).






4. 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.






5. A subsequent investment made by an investor who has made a previous investment in the company - generally a later stage investment in comparison to the initial investments.






6. Shares acquired in a private placement are considered restricted shares and may not be sold in a public offering absent registration - or after an appropriate holding period has expired. Non-affiliates must wait one year after purchasing the shares






7. An Agreement made between the investor and the company defining the rights and obligations of the parties involved. The process by which one arrives at the final term and conditions of the investment.






8. 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






9. 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






10. The method by which an investor will realize an investment.






11. 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






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






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






14. Document between general and limited partnership of each fund spells out details of the partnership.






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






16. First to absorb losses. Represents common shareholders' investment in a company. It includes common stock value - retained earnings - capital surplus.






17. These are performance goals against which a company's success is measured. Often - they are used by investors to help determine whether a company will receive additional funding or whether management will receive extra stock. Sometimes management wi






18. 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






19. 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.






20. The residual ownership in a company like a corporation or LLC 51%=control






21. A study of the background and financial reliability of the company - management team and industry.






22. 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






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






24. 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






25. How much the company is worth before an investment






26. The final event to complete the investment - at which time all the legal documents are signed and the funds are transferred.






27. 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






28. How you get to vote






29. 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.






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






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






32. 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






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






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






35. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity






36. 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.






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






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






39. 'I will buy stock at price we negotiate'






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






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






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






43. 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






44. 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






45. How you get out






46. An agreement issued by entrepreneurs to potential investors to protect the privacy of their ideas when disclosing those ideas to third parties.






47. The amount to be paid when the company is liquidated or sold before any payments are made lower classes of investors. Not everyone gets paid equally






48. Financing for a company expecting to go public usually within 6-12 months; usually so structured to be repaid from proceeds of a public offerings - or to establish floor price for public offer.






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






50. 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) ...







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