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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. Purchase of a business by an outside team of managers who have found financial backers and plan to manage the business actively themselves.






2. 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






3. 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






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






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






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






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






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






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






10. 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.






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






12. 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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13. Don't talk to the market about the company






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






15. 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.






16. 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






17. 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






18. 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






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






20. First to absorb losses. Represents common shareholders' investment in a company. It includes common stock value - retained earnings - capital surplus.






21. 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.






22. 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






23. 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.






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






25. 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.






26. 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.






27. Are the means by which an investor preserves its percentage of ownership in the company without having to make a new investment.






28. The method by which an investor will realize an investment.






29. 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






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






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






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






33. 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.






34. 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






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






36. 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






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






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






39. Term sheet for equity offering






40. Corporation's first offer to sell stock to the public - Allows for anyone to buy stock and now falls under the SEC (No longer accredited investor) ...






41. 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






42. 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






43. 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.






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






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






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






47. An agreement issued by entrepreneurs to potential investors to protect the privacy of their ideas when disclosing those ideas to third parties.






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






49. 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






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