Test your basic knowledge |

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. Cannot get other outside investors-No Shop






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






3. How you get out






4. 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.






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






6. 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






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






8. 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.






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






10. 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






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






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






13. 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 -






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






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






16. How you get to vote






17. 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






18. An IPO that has met certain






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






20. 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






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






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






23. 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






24. 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






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






26. 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






27. The internal rate of return on an investment.






28. Compound internal rate of return.






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






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






31. 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.






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






33. 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.






34. Purchase of stock in a company from a share holder - rather than purchasing stock directly from the company.






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






36. Term sheet for equity offering






37. 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.






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






39. 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.






40. 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.






41. How much the company is worth before an investment






42. 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






43. 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






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






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






46. 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.).






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






48. 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.






49. 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.






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