Test your basic knowledge |

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






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






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






4. 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






5. The way you buy stock






6. 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






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






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






9. 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.






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






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






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






13. 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






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






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






16. 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.






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






18. Shares acquired in a private placement are considered restricted shares and may not be sold in a public offering absent registration - or after an appropriate holding period has expired. Non-affiliates must wait one year after purchasing the shares






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






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






22. 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.






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






24. An IPO that has met certain






25. 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






26. Term sheet for equity offering






27. Compound internal rate of return.






28. 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.






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






30. Purchase of a business by an outside team of managers who have found financial backers and plan to manage the business actively themselves.






31. Cannot get other outside investors-No Shop






32. 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.






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






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






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






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






37. 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.






38. 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.






39. 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.






40. 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






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






42. 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






43. 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






44. 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






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






46. 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.






47. How you get out






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






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






50. 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.