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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 equity of the company and some types of debts (subordinated debt) but generally not senior secured debt (bank loan)






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






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






4. 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.






5. 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






6. 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.






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






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






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






11. 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






12. No double tax - Limited number of investors






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






14. 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






15. 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.






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






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






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. How much the company is worth before an investment






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






21. 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) ...






22. 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.






23. Term sheet for equity offering






24. Assets are subject to double taxation - Unlimited number of investors






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






26. 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






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






28. 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






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






30. 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






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






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






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






34. How you get to vote






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






36. 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.






37. 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






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






39. 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






40. 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.






41. 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 -






42. Letter of intent summarizing the key legal and financial terms






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






44. 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.






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






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






47. 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






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






49. 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






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