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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. How you get out






2. 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.






3. 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






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






5. 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






6. Unsecured debt - junior to senior debt (bank loan) and is senior to common stock and preferred. Gets paid last






7. 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






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






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






10. 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






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






12. 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.






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






14. The way you buy stock






15. 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) ...






16. Raising funds by offering ownership in a corporation through the issuing of shares of a corporation's common or preferred stock.






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






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






19. The internal rate of return on an investment.






20. 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






21. 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






22. This refers to a public offering subsequent to an initial public offering. A secondary public offering can be either an issuer offering or an offering by a group that has purchased the issuer's securities in the public markets.






23. The equity of the company and some types of debts (subordinated debt) but generally not senior secured debt (bank loan)






24. Letter of intent summarizing the key legal and financial terms






25. 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






26. 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






27. 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.






28. No double tax - Limited number of investors






29. Means of financing a small firm by employing highly creative ways of using and acquiring resources without raising equity from traditional sources or borrowing money from the bank.






30. Are the means by which an investor preserves its percentage of ownership in the company without having to make a new investment.






31. The amount of this available to a management team for venture investments.






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






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






34. 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.






35. How much the company is worth before an investment






36. A unit of ownership of a corporation. In the case of a public company - the stock is traded between investors on various exchanges. Owners of common stock are typically entitled to vote on the selection of directors and other important events and in






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






38. 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.






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






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






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






42. 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.






43. 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






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






45. 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






46. 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.






47. 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.






48. 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






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






50. A non-binding agreement setting forth the basic terms and conditions under which an investment will be made. This is a template that is used to develop more detailed legal documents.