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. An IPO that has met certain






2. Purchase of stock in a company from a share holder - rather than purchasing stock directly from the company.






3. 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.






4. Cannot get other outside investors-No Shop






5. The way you buy stock






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






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






8. 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






9. 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






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






11. Compound internal rate of return.






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






13. 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






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






15. The internal rate of return on an investment.






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






17. Pre-money valuation plus the amount invested in the latest round






18. 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






19. 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.






20. 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






21. How you get out






22. 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






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






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






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






26. 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






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






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






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






30. 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.






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






32. 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






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






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






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






36. How much the company is worth before an investment






37. 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






38. 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






39. 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






40. 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






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






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






43. 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.






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






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






46. 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






47. 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






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






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






50. Individuals that provide venture capital to seed or early stage companies. They can usually add value through their contracts and expertise.