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






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






3. The event in which the company is liquidated or sold (bankruptcy or sale to a public company)






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






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






6. 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.






7. 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.






8. 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






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






10. 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.






11. 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.






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






13. 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.






14. 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






15. 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






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






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






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






19. 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






20. 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






21. Compound internal rate of return.






22. The internal rate of return on an investment.






23. 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.






24. 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) ...






25. 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.






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






27. 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.






28. 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






29. 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






30. No double tax - Limited number of investors






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






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






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






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






35. 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






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






37. The way you buy stock






38. 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






39. The investigation and evaluation of a management team's characteristics - investment philosophy - and terms and conditions prior to committing capital to the fund.






40. 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.






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






42. 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






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






44. The reorganization of a company's capital structure. A company may seek to save on taxes by replacing preferred stock with bonds in order to gain interest deductibility.






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. How you get out






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






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






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






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