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






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






3. The repurchasing of all of a company's outstanding stock by employees or a private investor. As a result of such an initiative - the company stops being publicly traded. Sometimes - the company might have to take on significant debt to finance the






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






5. The internal rate of return on an investment.






6. The amount of this available to a management team for venture investments.






7. 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






8. 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






9. How much the company is worth before an investment






10. The way you buy stock






11. 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.






12. 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.






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






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






15. 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






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






17. 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






18. 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






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






20. 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






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






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






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






24. 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.






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






26. 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






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






28. 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






29. 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






30. 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






31. 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.






32. 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.






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






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






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






36. An IPO that has met certain






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






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






39. 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






40. 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






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






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






43. 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






44. 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.






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






46. 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






47. How you get to vote






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






49. 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






50. A request from the GPs requiring each limited partner to deliver a portion of their capital commitment. Usually specified as a percentage of the capital commitment

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