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






2. 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






3. The total value of the company immediately prior to the latest round of financing






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






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






6. 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






7. 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






8. 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.






9. 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.






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






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






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






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






14. 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.






15. Don't talk to the market about the company






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






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






18. Compound internal rate of return.






19. The equity of the company and some types of debts (subordinated debt) but generally not senior secured debt (bank loan)






20. 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.






21. 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






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






23. 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.






24. 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






25. 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.






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






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






28. 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






29. 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






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






31. Term sheet for equity offering






32. 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.






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






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






35. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything






36. 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






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






38. 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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


39. 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






40. 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.






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






42. 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.






43. 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






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






45. How much the company is worth before an investment






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






47. 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.






48. 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






49. A security with limits on its transferability. Usually issued in connection with a private placement






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