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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 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






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






3. 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






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






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






6. How much the company is worth before an investment






7. 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






8. 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






9. It refers mainly to insurance companies - pension funds and investment companies collecting savings and supplying funds to markets - but also to other types of institutional wealth (e.g. endowments funds - foundations etc.).






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






11. 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.






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






13. 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.






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






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






16. 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






17. 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






18. How you get out






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






20. 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






21. 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.






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






23. 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






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






26. 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.






27. 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






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






29. 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






30. Term sheet for equity offering






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






32. An IPO that has met certain






33. 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






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






35. 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






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






37. The internal rate of return on an investment.






38. 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.






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






40. 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.






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






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






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






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






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






46. 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






47. 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






48. The act of one company taking over controlling interest in another company. Investors often look for companies that are likely candidates for this - because the acquiring firms are often willing to pay a premium to the market price for the shares.






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






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