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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. 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






2. 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.






3. 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






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






6. 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






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






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






9. Compound internal rate of return.






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






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






12. 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.






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






14. An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.






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






16. An acquisition of a business using mostly debt and a small amount of equity. The debt is secured by the assets of the business.






17. No double tax - Limited number of investors






18. 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






19. 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.






20. How you get to vote






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






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






23. How you get out






24. 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.).






25. An IPO that has met certain






26. 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






27. These are lending and investment firms that are licensed by the federal government. The licensing enables them to borrow from the federal government to supplement the private funds of their investors. Some of these funds engage only in making loans t






28. 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






29. 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.






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






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






32. 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.






33. How much the company is worth before an investment






34. 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






35. The way you buy stock






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






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






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






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






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






42. 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.






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






44. Also called a 'Cap Table' - this is a table showing the total amount of the various securities issued by a firm. This typically includes the amount of investment obtained from each source and the securities distributed -- e.g. common and preferred s






45. 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.






46. 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






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






48. 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.






49. 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






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