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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. 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.






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






3. How you get to vote






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






5. 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






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






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






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






10. 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






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






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






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






14. 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.






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






16. Term sheet for equity offering






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






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






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






20. Compound internal rate of return.






21. 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






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






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






24. 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.






25. Cannot get other outside investors-No Shop






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






27. 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






28. 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.






29. 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.






30. 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.






31. 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.






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






33. The way you buy stock






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






35. 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






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






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






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






39. 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






40. 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






41. 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.






42. 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






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






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






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






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






47. 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.






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






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






50. The internal rate of return on an investment.