SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
Venture Capital
Start Test
Study First
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. 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
Lead Investor
leverage buy-out(LBO)
management buy-in (MBI)
executive summary
2. An acquisition of a business using mostly debt and a small amount of equity. The debt is secured by the assets of the business.
Restricted Shares
Qualified IPO
leverage buy-out(LBO)
Initial Public Offering
3. Letter of intent summarizing the key legal and financial terms
corporate venturing
General Partner (GP)
Term Sheet
lock-up period
4. Unsecured debt - junior to senior debt (bank loan) and is senior to common stock and preferred. Gets paid last
private equity
Initial Public Offering
Deal Structure
Subordinated Debt
5. A security with limits on its transferability. Usually issued in connection with a private placement
Restricted Stock
Preferred Stock
C Corporation
private investment in public equities (PIPE)
6. 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
Restricted Stock
Capital Call 'Drawdown'
Bridge Financing
Restricted Shares
7. 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
follow-on
debt financing
corporate venturing
Seed Money
8. 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
fund of funds
Elevator Pitch
Common Equity
lead investor
9. 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
series a preferred stock
private equity
lock-up period
Equity
10. 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.
Preferred Stock
Voting Rights
Term Sheet
syndication
11. 'I will buy stock at price we negotiate'
Stock Price Agreement
Corporation (Limited liability and taxation)
Term Sheet
series a preferred stock
12. How you get out
Liquidation Preference
Membership Interest
going private
turnaround
13. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything
Pre-Money Valuation
Bootstrapping
Senior Stock
Stock Price Agreement
14. The method by which an investor will realize an investment.
exit route
Restricted Shares
Market Capitalization
NDA (Non-disclosure agreement)
15. 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
16. The residual ownership in a company like a corporation or LLC 51%=control
Stock Price Agreement
Seed Money
NDA (Non-disclosure agreement)
Equity
17. Purchase of stock in a company from a share holder - rather than purchasing stock directly from the company.
IPO(initial public offerings)
fund of funds
secondary purchase
Bootstrapping
18. Capital raised for a private company from independently wealthy investors. This capital is generally used as seed financing.
recapitalization
Angel Financing
lead investor
term sheet
19. 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
PPM
Market Capitalization
Business Plan
Term Sheet
20. This refers to a synopsis of the key points of a business plan.
Voting Rights
secondary purchase
Market Capitalization
executive summary
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.
recapitalization
Pre-money valuation
PPM
lead investor
22. 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
debt financing
Voting Rights
Internal Rate of Return
recapitalization
23. These are lending and investment firms that are licensed by the federal government. The licensing enables them to borrow from the federal government to supplement the private funds of their investors. Some of these funds engage only in making loans t
S Corporation
Senior Stock
NDA (Non-disclosure agreement)
small business investment companies (SBIC)
24. 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
private investment in public equities (PIPE)
Capital
raising capital
Series A Preferred Stock
25. The value at which an asset is carried on a balance sheet (the cost of the item)
Angel Financing
Subordinated Debt
Book Value
executive summary
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
Post-Money Valuation
S Corporation
Market Capitalization
venture capital
27. Cannot get other outside investors-No Shop
minority enterprise small business investment companies (MESBICS)
S Corporation
No Shop/Confidentiality
bridge loans
28. Date the LP's subscription is effective and they become partner
Closing
Bootstrapping
term sheet
Venture Capital Financing
29. Funds provided to enable an enterprise to acquire another enterprise or product line or business.
Liquidation Preference
buyout
Post-Money Valuation
Term Sheet
30. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity
buyout
Warrants
Pre-Money Valuation
No Shop/Confidentiality
31. 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.
Business Plan
Subordinated Debt
liquidation
seed capital
32. Used to compute net worth as the difference between total assets and total liabilities. adjusted value up to reflect market value
Due Diligence
Capital
Adjusted Book Value
Membership Interest
33. The valuation of a company prior to a round of investment. This amount is determined by using various calculation models - such as discounted P/E ratios multiplied by periodic earnings or a multiple times a future cash flow discounted to a present c
Pre-Money Valuation
Restricted Shares
Stock Price Agreement
secondary public offering
34. This refers to obtaining capital from investors or venture capital sources.
private equity
Post-Money Valuation
Capital Commitment
raising capital
35. 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.).
institutional investors
portfolio compaay
Term Sheet
private investment in public equities (PIPE)
36. 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
raising capital
Series A Preferred Stock
Limited Partner
closing
37. 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
IRR
Bridge Financing
benchmarks
Capital Call 'Drawdown'
38. 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.
mezzanine financing
Post-Money Valuation
IPO(initial public offerings)
Post-money
39. The sale or exchange of a significant amount of company ownership for cash - debt - or equity of another company.
Confidentiality
exit
Preferred Stock
liquidation
40. The equity ownership in a corporation. Also has basic voting rights
institutional investors
series a preferred stock
equity offerings
Common Stock
41. Issue of shares of a company to the public by the company (directly) for the first time.
Limited Partnership Agreement
lock-up period
IPO(initial public offerings)
capital under management
42. A financial institution specializing in the provision of equity and other forms of long-term capital to enterprises - usually to firms with a limited track record but with the expectation of substantial growth. The venture capitalist may provide bot
Venture Capitalist
closing
Corporation (Limited liability and taxation)
term sheet
43. 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.
turnaround
Preferred Stock
closing
going private
44. How you get to vote
private investment in public equities (PIPE)
closing
IPO(initial public offerings)
Voting Rights
45. 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.
Angel Financing
Capitalization Table
series a preferred stock
Bootstrapping
46. 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.
Dividends
Deal Structure
Conversion Rights
Liquidation Preference
47. 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.
Bridge Financing
Capital Commitment
Market Capitalization
Due Diligence
48. 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
IRR
going private
Seed Money
management buy-out (MBO)
49. A brief statement covering the main points that includes a discussion of management - profits - strategic position - and exit plan
lead investor
Liquidation
private investment in public equities (PIPE)
Business Summary
50. An agreement issued by entrepreneurs to potential investors to protect the privacy of their ideas when disclosing those ideas to third parties.
minority enterprise small business investment companies (MESBICS)
management buy-out (MBO)
NDA (Non-disclosure agreement)
Venture Capital Financing