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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. An IPO that has met certain






2. 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.






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






4. Term sheet for equity offering






5. The act of one company taking over controlling interest in another company. Investors often look for companies that are likely candidates for this - because the acquiring firms are often willing to pay a premium to the market price for the shares.






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






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






8. 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






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






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






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






12. 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.






13. 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






14. Cannot get other outside investors-No Shop






15. 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.






16. 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






17. How you get out






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






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






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






21. Money that business owners must pay back with interest. There are myriad types of these - from simple commercial loans to bridge/swing loans in which a lender makes a short-term loan in anticipation of equity financing at a later stage in the develo






22. 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






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






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






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






26. 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.






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






28. 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






29. 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.






30. 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.






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






32. How much the company is worth before an investment






33. 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.






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






35. 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






36. 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.






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. 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.).






39. The way you buy stock






40. How fast you can turn it into cash - termination of a business operation by using its assets to discharge its liabilities






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






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






43. 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.






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






45. 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.






46. Allows the holder to choose whether a merge or sale will be treated as a liquidation event for the purpose of receiving the funds they are entitled to under the liquidation preferences of the term sheet






47. 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






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






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






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