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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. 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






3. 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.






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






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






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






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. 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






9. 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






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






11. The process whereby a group of venture capitalists will each put in a portion of the amount of money needed to finance a small business.






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






13. 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.






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






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






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






17. 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.






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






19. 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






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






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






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






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






24. A security with limits on its transferability. Usually issued in connection with a private placement






25. The sale or distribution of a stock of a portfolio company to the public for the first time. IPOs are often an opportunity for the existing investors (often venture capitalists) to receive significant returns on their original investment. During peri






26. 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






27. 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






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






29. 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






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






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






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






33. A unit of ownership of a corporation. In the case of a public company - the stock is traded between investors on various exchanges. Owners of common stock are typically entitled to vote on the selection of directors and other important events and in






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






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






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






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






38. The internal rate of return on an investment.






39. 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






40. The way you buy stock






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






42. Cannot get other outside investors-No Shop






43. 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






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. 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.






46. A non-binding agreement setting forth the basic terms and conditions under which an investment will be made. This is a template that is used to develop more detailed legal documents.






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






48. 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






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






50. These are equity securities of companies that have not 'gone public' (in other words - companies that have not listed their stock on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are no