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Venture Capital

Subject : industries
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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 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






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






3. 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






4. Compound internal rate of return.






5. 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






6. 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






7. 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






8. The way you buy stock






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






10. No double tax - Limited number of investors






11. 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.






12. 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.).






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






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






15. 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.






16. 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






17. 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






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






19. How much the company is worth before an investment






20. 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.






21. 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






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






23. 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






24. Term sheet for equity offering






25. 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.






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






27. First to absorb losses. Represents common shareholders' investment in a company. It includes common stock value - retained earnings - capital surplus.






28. 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.






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






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






31. The final event to complete the investment - at which time all the legal documents are signed and the funds are transferred.






32. 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






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






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






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






36. 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.






37. 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






38. Cannot get other outside investors-No Shop






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






40. Force sell of stock at a predetermined price. The rights by which the investor's preferred stock or subordinated debt 'converts' into common stock






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






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






43. 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






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






45. Document between general and limited partnership of each fund spells out details of the partnership.






46. 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.






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






48. 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






49. 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.






50. 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