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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. 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






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






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






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






5. 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






6. 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.






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






8. 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.






9. 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






10. 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






11. How you get to vote






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






13. 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.






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






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






16. 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.






17. 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






18. 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






19. 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






20. Issue of shares of a company to the public by the company (directly) for the first time.






21. 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






22. 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


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






24. 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






25. 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.






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






27. The way you buy stock






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






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






30. A business owned by stockholders who share in its profits but are not personally responsible for its debts






31. 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






32. 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






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






34. Cannot get other outside investors-No Shop






35. 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.






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






37. The equity ownership in a corporation. Also has basic voting rights






38. 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) ...






39. No double tax - Limited number of investors






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






41. 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






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






43. 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






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






45. 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






46. 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






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. The equity ownership in a LLC. May be either common or preferred. Partnership agreement






49. Compound internal rate of return.






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