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






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






3. 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.).






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






5. 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 -






6. 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






7. 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






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






9. 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






10. 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.






11. 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






12. Letter of intent summarizing the key legal and financial terms






13. 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.






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. Are the means by which an investor preserves its percentage of ownership in the company without having to make a new investment.






16. 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






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






18. 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






19. 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






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






21. 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.






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






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






24. 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






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






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






27. No double tax - Limited number of investors






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






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






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






31. 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






32. 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






33. 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) ...






34. 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






35. How much the company is worth before an investment






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






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






38. 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






39. 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.






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






41. An IPO that has met certain






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






43. The sale of the assets of a portfolio company to one or more acquirers when venture capital investors receive some of the proceeds of the sale.






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






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






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






47. 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.






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






49. 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.






50. 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.