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. 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.






2. How you get out






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






4. 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






5. The investor who leads a group of investors into an investment. Usually one venture capitalist will be this when a group of venture capitalists invest in a single business.






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






7. A security with limits on its transferability. Usually issued in connection with a private placement






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






9. 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






10. Funds provided to enable an enterprise to acquire another enterprise or product line or business.






11. 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






12. The way you buy stock






13. 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.






14. 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






15. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity






16. 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.






17. The internal rate of return on an investment.






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






19. This word is used to describe businesses that are in trouble and whose management will cause the business to become profitable so they are no longer in trouble.






20. How much the company is worth before an investment






21. 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






22. 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.






23. 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






24. When an investor sells a stock - bond or mutual fund at a higher price than he or she paid for it.






25. 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.






26. 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






27. 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.






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






29. 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 -






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






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






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






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






34. 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.






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






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






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






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






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






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






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






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






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






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






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






46. The total value of the company immediately prior to the latest round of financing






47. 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.).






48. The value at which an asset is carried on a balance sheet (the cost of the item)






49. 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






50. Cannot get other outside investors-No Shop