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Venture Capital

Subject : industries
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. Pre-money valuation plus the amount invested in the latest round






2. 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






3. Term sheet for equity offering






4. 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.






5. 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.






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






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






8. 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






9. Corporation's first offer to sell stock to the public - Allows for anyone to buy stock and now falls under the SEC (No longer accredited investor) ...






10. 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






11. The way you buy stock






12. 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.






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. Document between general and limited partnership of each fund spells out details of the partnership.






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






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






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






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






19. The internal rate of return on an investment.






20. 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






21. 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.






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






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






25. An IPO that has met certain






26. 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.






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






28. 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






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






30. 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






31. Compound internal rate of return.






32. 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






33. 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.






34. 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






35. How much the company is worth before an investment






36. No double tax - Limited number of investors






37. 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






38. 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.






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






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






41. 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






42. 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 -






43. Capital raised for a private company from independently wealthy investors. This capital is generally used as seed financing.






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






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






47. 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.






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






49. 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.






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