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






2. 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






3. These are short-term financing agreements that fund a company's operation until it can arrange a more comprehensive longer-term financing. The need for these arises when a company runs out of cash before it can obtain more capital investment though l






4. 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.






5. 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.






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






7. 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






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






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






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






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






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






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. 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.






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






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






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






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






19. The legal structure used by most venture and private equity funds. Usually fixed life investment vehicles. The general partner or management firm manages the partnership using policy laid down in a partnership agreement. The agreement also covers -






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






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






22. 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.






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






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






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






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






27. 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.






28. 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






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






30. 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.






31. The internal rate of return on an investment.






32. 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.).






33. 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






34. The practice of a large company taking a minority equity position in a smaller company in a related field.






35. 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






36. 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.






37. 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






38. Date the LP's subscription is effective and they become partner






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






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






41. 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.






42. How you get to vote






43. How you get out






44. 'I will buy stock at price we negotiate'






45. Means of financing a small firm by employing highly creative ways of using and acquiring resources without raising equity from traditional sources or borrowing money from the bank.






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






47. 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






48. This refers to a public offering subsequent to an initial public offering. A secondary public offering can be either an issuer offering or an offering by a group that has purchased the issuer's securities in the public markets.






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






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