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. A business owned by stockholders who share in its profits but are not personally responsible for its debts
Equity
Corporation (Limited liability and taxation)
closing
Capitalization Table
2. How you get out
Angel Financing
Liquidation Preference
Limited Partnership Agreement
secondary public offering
3. 'I will buy stock at price we negotiate'
mezzanine financing
Stock Price Agreement
Preferred Stock
Burn Rate
4. 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
Preferred Stock
leverage buy-out(LBO)
Post-Money Valuation
Dividends
5. 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.
Anti-Dilution Protections
term sheet
Bridge Financing
Post-Money Valuation
6. The rate at which a company expends net cash over a certain period - usually a month.
Burn Rate
Stock Price Agreement
equity offerings
series a preferred stock
7. The company or entity into which a fund invests directly.
Pre-Money Valuation
secondary public offering
Senior Stock
portfolio compaay
8. Are the means by which an investor preserves its percentage of ownership in the company without having to make a new investment.
return on investment (ROI)
turnaround
Restricted Shares
Anti-Dilution Protections
9. Purchase of a business by an outside team of managers who have found financial backers and plan to manage the business actively themselves.
management buy-in (MBI)
exit
turnaround
Adjusted Book Value
10. 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.
small business investment companies (SBIC)
management buy-out (MBO)
secondary purchase
Post-money
11. 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.
Liquidity Event
management buy-out (MBO)
Capital Commitment
lock-up period
12. The amount of this available to a management team for venture investments.
Preferred Stock
Capital Commitment
capital under management
Cash-out election
13. 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.).
secondary purchase
institutional investors
Seed Money
capital under management
14. 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
Capitalization Table
Initial Public Offering
corporate venturing
portfolio compaay
15. 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
term sheet
Liquidation Preference
Bootstrapping
Elevator Pitch
16. 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
portfolio compaay
Preferred Stock
leverage buy-out(LBO)
term sheet
17. How much the company is worth before an investment
Pre-Money Valuation
Post-Money Valuation
Bootstrapping
Seed Money
18. An agreement issued by entrepreneurs to potential investors to protect the privacy of their ideas when disclosing those ideas to third parties.
NDA (Non-disclosure agreement)
Bootstrapping
series a preferred stock
Warrants
19. Cannot get other outside investors-No Shop
Preferred Stock
capital under management
recapitalization
No Shop/Confidentiality
20. 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
Conversion Rights
series a preferred stock
Common Stock
Internal Rate of Return
21. Raising funds by offering ownership in a corporation through the issuing of shares of a corporation's common or preferred stock.
corporate venturing
Business Summary
equity offerings
Liquidation
22. Date the LP's subscription is effective and they become partner
Venture Capitalist
Market Capitalization
Lead Investor
Closing
23. A security with limits on its transferability. Usually issued in connection with a private placement
Restricted Stock
NDA (Non-disclosure agreement)
Pre-Money Valuation
going private
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
benchmarks
management buy-out (MBO)
Market Capitalization
raising capital
25. 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
S Corporation
equity offerings
Senior Stock
venture capital
26. 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.
S Corporation
mezzanine financing
Conversion Rights
Outstanding Stock
27. 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
Deal Structure
Capital Commitment
exit
Post-Money Valuation
28. 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.
Outstanding Stock
term sheet
Common Stock
return on investment (ROI)
29. When an investor sells a stock - bond or mutual fund at a higher price than he or she paid for it.
capital gain
Warrants
Deal Structure
seed capital
30. 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
Seed Money
IPO(initial public offerings)
Market Capitalization
small business investment companies (SBIC)
31. The method by which an investor will realize an investment.
Capital Commitment
exit route
Warrants
Private Equity
32. Individuals that provide venture capital to seed or early stage companies. They can usually add value through their contracts and expertise.
angel investors
Preferred Stock
Restricted Shares
lock-up period
33. A class of capital stock that may pay dividends at a specified rate and that has priority over common stock in the payment of dividends and the liquidation of assets. Many venture capital investments use preferred stock as their investment vehicle. T
Post-Money Valuation
Preferred Stock
venture capital
Adjusted Book Value
34. 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
limited partnerships
private investment in public equities (PIPE)
Series A Preferred Stock
Dividends
35. 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
IPO (Initial Public Offering)
Bridge Financing
Series A Preferred Stock
leverage buy-out(LBO)
36. The rate of return or profit that an investment is expected to earn.
Venture Capital Financing
Capital
Internal Rate of Return
NDA (Non-disclosure agreement)
37. Unsecured debt - junior to senior debt (bank loan) and is senior to common stock and preferred. Gets paid last
Subordinated Debt
Stock Price Agreement
Cash-out election
corporate venturing
38. A non-binding agreement setting forth the basic terms and conditions under which an investment will be made. This is a template that is used to develop more detailed legal documents.
Corporation (Limited liability and taxation)
term sheet
leverage buy-out(LBO)
bridge loans
39. 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
series a preferred stock
lock-up period
Restricted Shares
Qualified IPO
40. 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 Stock
leverage buy-out(LBO)
Conversion Rights
Pre-Money Valuation
41. Letter of intent summarizing the key legal and financial terms
Term Sheet
liquidation
turnaround
Adjusted Book Value
42. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity
Lead Investor
seed capital
Subordinated Debt
Warrants
43. The equity ownership in a LLC. May be either common or preferred. Partnership agreement
No Shop/Confidentiality
Preferred Stock
IPO(initial public offerings)
Membership Interest
44. Term sheet for equity offering
PPM
Term Sheet
Capital Commitment
Due Diligence
45. Compound internal rate of return.
closing
Conversion Rights
IRR
Business Plan
46. Funds provided to enable an enterprise to acquire another enterprise or product line or business.
mezzanine financing
Liquidation Preference
equity offerings
buyout
47. 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.
term sheet
going private
Deal Structure
institutional investors
48. A brief statement covering the main points that includes a discussion of management - profits - strategic position - and exit plan
Liquidation Preference
Business Summary
secondary purchase
Private Equity
49. A unit of ownership of a corporation. In the case of a public company - the stock is traded between investors on various exchanges. Owners of common stock are typically entitled to vote on the selection of directors and other important events and in
Dividends
Common Stock
Market Capitalization
Elevator Pitch
50. The maximum amount of cash that a partner is required to contribute under the terms
Capital Commitment
exit route
NDA (Non-disclosure agreement)
term sheet