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. 'I will buy stock at price we negotiate'






2. These are short-term financing agreements that fund a company's operation until it can arrange a more comprehensive longer-term financing. The need for these arises when a company runs out of cash before it can obtain more capital investment though l






3. 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






4. 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.






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






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






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






8. 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






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






10. 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.






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






12. 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






13. 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






14. 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.






15. 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






16. An agreement issued by entrepreneurs to potential investors to protect the privacy of their ideas when disclosing those ideas to third parties.






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






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






19. 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






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






21. 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






22. 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.).






23. 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






24. 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






25. Cannot get other outside investors-No Shop






26. 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






27. The sale of the assets of a portfolio company to one or more acquirers when venture capital investors receive some of the proceeds of the sale.






28. 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.






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






30. Date the LP's subscription is effective and they become partner






31. 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.






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






33. 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






34. How you get to vote






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






36. How you get out






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






38. 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.






39. Selling an interest in your business to an outside party to raise money.






40. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything






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






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






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






44. Term sheet for equity offering






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






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






47. 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.






48. 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






49. 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






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