SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
Venture Capital
Start Test
Study First
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. 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
Outstanding Stock
debt financing
Capital Call 'Drawdown'
lock-up period
2. 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
exit route
private equity
Corporation (Limited liability and taxation)
Preferred Stock
3. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity
Common Equity
Warrants
IPO (Initial Public Offering)
Common Stock
4. 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.
Series A Preferred Stock
management buy-out (MBO)
management buy-in (MBI)
lead investor
5. 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
Capitalization Table
lead investor
Preferred Stock
syndication
6. Cannot get other outside investors-No Shop
Corporation (Limited liability and taxation)
Pre-Money Valuation
No Shop/Confidentiality
IRR
7. 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.
management buy-in (MBI)
Stock Price Agreement
Venture Capitalist
Bridge Financing
8. 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.
minority enterprise small business investment companies (MESBICS)
Book Value
Pre-Money Valuation
management buy-out (MBO)
9. A business owned by stockholders who share in its profits but are not personally responsible for its debts
Corporation (Limited liability and taxation)
buyout
Post-money
Series A Preferred Stock
10. The rate of return or profit that an investment is expected to earn.
closing
angel investors
private equity
Internal Rate of Return
11. 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
Initial Public Offering
Pre-Money Valuation
equity offerings
leverage buy-out(LBO)
12. The rate at which a company expends net cash over a certain period - usually a month.
management buy-in (MBI)
Burn Rate
Deal Structure
Stock Price Agreement
13. Letter of intent summarizing the key legal and financial terms
Capitalization Table
Bootstrapping
Term Sheet
Adjusted Book Value
14. Purchase of a business by an outside team of managers who have found financial backers and plan to manage the business actively themselves.
Common Stock
management buy-in (MBI)
Angel Financing
IPO(initial public offerings)
15. The equity ownership in a corporation. Also has basic voting rights
Due Diligence
Term Sheet
Common Stock
Lead Investor
16. 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.
turnaround
corporate venturing
Common Stock
Warrants
17. The total value of the company immediately prior to the latest round of financing
debt financing
Equity
Pre-money valuation
Business Plan
18. 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.
Qualified IPO
Deal Structure
secondary purchase
management buy-in (MBI)
19. Assets are subject to double taxation - Unlimited number of investors
C Corporation
Bootstrapping
small business investment companies (SBIC)
Post-Money Valuation
20. 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.
equity offerings
capital under management
Limited Partner
mezzanine financing
21. An IPO that has met certain
Qualified IPO
Post-money
closing
Equity
22. The method by which an investor will realize an investment.
executive summary
Voting Rights
exit route
benchmarks
23. The event in which the company is liquidated or sold (bankruptcy or sale to a public company)
Liquidity Event
turnaround
Restricted Shares
recapitalization
24. 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
Market Capitalization
IPO(initial public offerings)
capital under management
Due Diligence
25. Are the means by which an investor preserves its percentage of ownership in the company without having to make a new investment.
Bootstrapping
Anti-Dilution Protections
mezzanine financing
angel investors
26. 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.
IRR
term sheet
Confidentiality
Pre-money valuation
27. 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
Limited Partner
Market Capitalization
exit
Adjusted Book Value
28. An agreement issued by entrepreneurs to potential investors to protect the privacy of their ideas when disclosing those ideas to third parties.
leverage buy-out(LBO)
Bootstrapping
recapitalization
NDA (Non-disclosure agreement)
29. The first round of capital for a start-up business. Seed money usually takes the structure of a loan or an investment in preferred stock or convertible bonds - although sometimes it is common stock. Seed money provides startup companies with the cap
Seed Money
Initial Public Offering
Senior Stock
turnaround
30. Unsecured debt - junior to senior debt (bank loan) and is senior to common stock and preferred. Gets paid last
Subordinated Debt
Capital
Limited Partnership Agreement
Deal Structure
31. The maximum amount of cash that a partner is required to contribute under the terms
Capital Commitment
Restricted Stock
benchmarks
portfolio compaay
32. 'I will buy stock at price we negotiate'
Angel Financing
Dividends
Stock Price Agreement
IRR
33. Pre-money valuation plus the amount invested in the latest round
Equity
Post-money
C Corporation
Preferred Stock
34. 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
Capitalization Table
exit
exit route
lock-up period
35. These are performance goals against which a company's success is measured. Often - they are used by investors to help determine whether a company will receive additional funding or whether management will receive extra stock. Sometimes management wi
series a preferred stock
Limited Partnership Agreement
benchmarks
Qualified IPO
36. 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.
syndication
Burn Rate
IPO (Initial Public Offering)
Cash-out election
37. 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.
executive summary
recapitalization
Closing
C Corporation
38. A security with limits on its transferability. Usually issued in connection with a private placement
recapitalization
institutional investors
Pre-Money Valuation
Restricted Stock
39. Individuals that provide venture capital to seed or early stage companies. They can usually add value through their contracts and expertise.
angel investors
acquisition
Anti-Dilution Protections
benchmarks
40. Raising funds by offering ownership in a corporation through the issuing of shares of a corporation's common or preferred stock.
Common Equity
Senior Stock
Restricted Stock
equity offerings
41. 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.
liquidation
Liquidation Preference
syndication
series a preferred stock
42. The sale or exchange of a significant amount of company ownership for cash - debt - or equity of another company.
private investment in public equities (PIPE)
exit
Limited Partner
syndication
43. A brief statement covering the main points that includes a discussion of management - profits - strategic position - and exit plan
Deal Structure
Business Summary
Capital Commitment
Liquidation Preference
44. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything
Capital Commitment
Senior Stock
series a preferred stock
Book Value
45. Equity securities of companies that have not 'gone public' (are not listed on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are not listed on an exchange - any investor wishing to sell
Private Equity
Adjusted Book Value
Preferred Stock
recapitalization
46. The value at which an asset is carried on a balance sheet (the cost of the item)
Corporation (Limited liability and taxation)
Book Value
lead investor
Burn Rate
47. When an investor sells a stock - bond or mutual fund at a higher price than he or she paid for it.
closing
Restricted Stock
capital gain
Pre-money valuation
48. No double tax - Limited number of investors
Pre-money valuation
Capital Commitment
S Corporation
Capitalization Table
49. An investment vehicle designed to invest in a diversified group of investment funds.
fund of funds
limited partnerships
capital under management
Restricted Shares
50. 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
Post-Money Valuation
small business investment companies (SBIC)
Closing
executive summary