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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. 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.






2. How you get to vote






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






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






5. 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






6. 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.






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






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






9. 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.






10. Assets are subject to double taxation - Unlimited number of investors






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






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






13. 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






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






15. 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






16. Individuals that provide venture capital to seed or early stage companies. They can usually add value through their contracts and expertise.






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






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






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. A class of capital stock that may pay dividends at a specified rate and that has priority over common stock in the payment of dividends and the liquidation of assets. Many venture capital investments use preferred stock as their investment vehicle. T






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






22. A unit of ownership of a corporation. In the case of a public company - the stock is traded between investors on various exchanges. Owners of common stock are typically entitled to vote on the selection of directors and other important events and in






23. 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.






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






25. 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.






26. 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






27. 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.






28. 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






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






30. 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






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






33. 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






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






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






36. The rate at which a company expends net cash over a certain period - usually a month.






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






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






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






40. An IPO that has met certain






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






42. Compound internal rate of return.






43. Term sheet for equity offering






44. 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






45. 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






46. 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






47. Also known as a bell cow investor. Member of a syndicate of private equity investors holding the largest stake - in charge of arranging the financing and most actively involved in the overall project






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






49. How you get out






50. The amount of this available to a management team for venture investments.