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. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity
Internal Rate of Return
Warrants
Adjusted Book Value
C Corporation
2. The way you buy stock
Due Diligence
Qualified IPO
PPM
Liquidation Preference
3. An investment vehicle designed to invest in a diversified group of investment funds.
bridge loans
Subordinated Debt
fund of funds
equity financing
4. How fast you can turn it into cash - termination of a business operation by using its assets to discharge its liabilities
series a preferred stock
Liquidation
private investment in public equities (PIPE)
Limited Partner
5. Selling an interest in your business to an outside party to raise money.
capital gain
equity financing
exit route
term sheet
6. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything
secondary public offering
Elevator Pitch
Senior Stock
Post-Money Valuation
7. Purchase of stock in a company from a share holder - rather than purchasing stock directly from the company.
secondary purchase
Pre-money valuation
Term Sheet
institutional investors
8. 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
C Corporation
debt financing
Burn Rate
Market Capitalization
9. The sale or exchange of a significant amount of company ownership for cash - debt - or equity of another company.
Business Summary
exit
Pre-money valuation
management buy-out (MBO)
10. Funds provided to enable an enterprise to acquire another enterprise or product line or business.
Venture Capitalist
Due Diligence
buyout
debt financing
11. 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
Bootstrapping
Capital Call 'Drawdown'
Preferred Stock
venture capital
12. 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
Post-Money Valuation
exit route
Capital
mezzanine financing
13. Don't talk to the market about the company
Internal Rate of Return
minority enterprise small business investment companies (MESBICS)
term sheet
Confidentiality
14. A study of the background and financial reliability of the company - management team and industry.
Confidentiality
C Corporation
Due Diligence
General Partner (GP)
15. Used to compute net worth as the difference between total assets and total liabilities. adjusted value up to reflect market value
C Corporation
Warrants
PPM
Adjusted Book Value
16. The rate of return or profit that an investment is expected to earn.
leverage buy-out(LBO)
Due Diligence
Internal Rate of Return
bridge loans
17. 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
Liquidity Event
Bootstrapping
Capitalization Table
18. A business owned by stockholders who share in its profits but are not personally responsible for its debts
management buy-in (MBI)
minority enterprise small business investment companies (MESBICS)
Corporation (Limited liability and taxation)
NDA (Non-disclosure agreement)
19. Investments by a private equity fund in a publicly traded company - usually at a discount.
series a preferred stock
private investment in public equities (PIPE)
Qualified IPO
S Corporation
20. Document between general and limited partnership of each fund spells out details of the partnership.
Limited Partnership Agreement
return on investment (ROI)
Restricted Shares
Senior Stock
21. 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
IPO(initial public offerings)
private equity
benchmarks
Liquidation Preference
22. 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
Liquidation Preference
Lead Investor
S Corporation
term sheet
23. Date the LP's subscription is effective and they become partner
Closing
S Corporation
IRR
leverage buy-out(LBO)
24. 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.
Liquidation Preference
term sheet
syndication
PPM
25. 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
private equity
Elevator Pitch
leverage buy-out(LBO)
Series A Preferred Stock
26. Are the means by which an investor preserves its percentage of ownership in the company without having to make a new investment.
Term Sheet
Anti-Dilution Protections
corporate venturing
Preferred Stock
27. 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
Market Capitalization
private equity
Common Equity
Venture Capitalist
28. 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
NDA (Non-disclosure agreement)
Preferred Stock
Business Plan
benchmarks
29. This refers to obtaining capital from investors or venture capital sources.
Dividends
raising capital
Preferred Stock
IPO (Initial Public Offering)
30. 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.
corporate venturing
Bridge Financing
Business Summary
No Shop/Confidentiality
31. Term sheet for equity offering
Term Sheet
IPO(initial public offerings)
syndication
private investment in public equities (PIPE)
32. The equity ownership in a corporation. Also has basic voting rights
Common Stock
Elevator Pitch
Membership Interest
IRR
33. First to absorb losses. Represents common shareholders' investment in a company. It includes common stock value - retained earnings - capital surplus.
Common Stock
Common Equity
Elevator Pitch
private investment in public equities (PIPE)
34. 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
Senior Stock
Anti-Dilution Protections
bridge loans
leverage buy-out(LBO)
35. 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.
Corporation (Limited liability and taxation)
Senior Stock
exit
Outstanding Stock
36. 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
recapitalization
capital gain
Common Stock
term sheet
37. The internal rate of return on an investment.
Cash-out election
Angel Financing
return on investment (ROI)
Burn Rate
38. The equity ownership in a LLC. May be either common or preferred. Partnership agreement
Business Summary
equity offerings
Common Stock
Membership Interest
39. Assets are subject to double taxation - Unlimited number of investors
NDA (Non-disclosure agreement)
C Corporation
Closing
follow-on
40. The total value of the company immediately prior to the latest round of financing
debt financing
corporate venturing
Pre-money valuation
Dividends
41. No double tax - Limited number of investors
Elevator Pitch
S Corporation
term sheet
exit
42. 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
acquisition
Cash-out election
venture capital
43. How much the company is worth before an investment
equity financing
Deal Structure
fund of funds
Pre-Money Valuation
44. Force sell of stock at a predetermined price. The rights by which the investor's preferred stock or subordinated debt 'converts' into common stock
Venture Capitalist
Limited Partner
Business Summary
Conversion Rights
45. 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
management buy-out (MBO)
Elevator Pitch
Post-money
Outstanding Stock
46. How you get out
Term Sheet
return on investment (ROI)
leverage buy-out(LBO)
Liquidation Preference
47. Raising funds by offering ownership in a corporation through the issuing of shares of a corporation's common or preferred stock.
NDA (Non-disclosure agreement)
equity offerings
Membership Interest
Adjusted Book Value
48. 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
portfolio compaay
Preferred Stock
debt financing
executive summary
49. 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 -
private equity
Adjusted Book Value
Equity
limited partnerships
50. The practice of a large company taking a minority equity position in a smaller company in a related field.
Subordinated Debt
corporate venturing
series a preferred stock
secondary public offering