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






2. 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) ...






3. Cannot get other outside investors-No Shop






4. 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.






5. 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






6. 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






7. A business owned by stockholders who share in its profits but are not personally responsible for its debts






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






9. 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.






10. How you get to vote






11. 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






12. 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






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






14. 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






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






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






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






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






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






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






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






24. How much the company is worth before an investment






25. Cash - stock and other property by the company to the investor in the investor's capacity as a stock - payment to owner for their appreciation






26. 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






27. 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






28. No double tax - Limited number of investors






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 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.






31. 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






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






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






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






35. How you get out






36. 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






37. 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.






38. 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.






39. 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.






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






41. 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.






42. 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






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






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






45. 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.






46. 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






47. 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.).






48. The way you buy stock






49. 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






50. 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.