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






2. Cash - stock and other property by the company to the investor in the investor's capacity as a stock - payment to owner for their appreciation






3. 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.






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






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. No double tax - Limited number of investors






7. Term sheet for equity offering






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






9. 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






10. Cannot get other outside investors-No Shop






11. 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.






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






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






14. 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






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






16. The internal rate of return on an investment.






17. 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






18. 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.






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






20. 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






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






22. 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 -






23. Compound internal rate of return.






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






25. 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






26. 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






27. 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.






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






29. How you get out






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






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






32. 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.






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






35. 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.).






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






37. 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






38. 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






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






40. The valuation of a company prior to a round of investment. This amount is determined by using various calculation models - such as discounted P/E ratios multiplied by periodic earnings or a multiple times a future cash flow discounted to a present c






41. 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






42. 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






43. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity






44. 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.






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






46. 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






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






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






49. 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.






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