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






2. 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






3. 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.






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






5. 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.






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






7. An investment vehicle designed to invest in a diversified group of investment funds.






8. Cannot get other outside investors-No Shop






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






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






11. The internal rate of return on an investment.






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






13. 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.






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






15. 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






16. 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






17. 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.






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






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






20. 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.






21. 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






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






23. 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






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






25. 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






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






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






28. Term sheet for equity offering






29. 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.






30. 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






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






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






33. 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






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






35. 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






36. 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.).






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






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






39. An IPO that has met certain






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






41. 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

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42. No double tax - Limited number of investors






43. 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






44. 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.






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






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






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






48. 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






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






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







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