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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 much the company is worth before an investment






2. 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






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






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






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






6. 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.






7. 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.






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






9. 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.






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. 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






12. 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.






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






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






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






18. 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






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






20. 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.






21. Term sheet for equity offering






22. 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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23. 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.






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






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






26. Cannot get other outside investors-No Shop






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






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






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






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






31. 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






32. 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.






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






34. How you get to vote






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






36. 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 -






37. 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






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 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






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






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






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






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






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






45. 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






46. 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






47. 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.






48. The way you buy stock






49. 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.






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