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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. 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






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






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






4. 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.






5. 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.






6. 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






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






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






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






10. 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.






11. 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.






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






13. The investor who leads a group of investors into an investment. Usually one venture capitalist will be this when a group of venture capitalists invest in a single business.






14. 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.






15. 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






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






17. 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.).






18. 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.






19. Term sheet for equity offering






20. How you get to vote






21. 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.






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






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






25. 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.






26. The period an investor must wait before selling or trading company shares subsequent to an exit. Usually in an initial public offering this period is determined by the underwriters.






27. The legal structure used by most venture and private equity funds. Usually fixed life investment vehicles. The general partner or management firm manages the partnership using policy laid down in a partnership agreement. The agreement also covers -






28. 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.






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






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






31. 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






32. 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






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






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






36. How much the company is worth before an investment






37. 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






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






39. Compound internal rate of return.






40. 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.






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


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






43. 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.






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






45. 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






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






47. Don't talk to the market about the company






48. Cannot get other outside investors-No Shop






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






50. 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