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. Pre-money valuation plus the amount invested in the latest round






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






3. How you get to vote






4. 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






5. 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






6. 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.






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






8. The rate at which a company expends net cash over a certain period - usually a month.






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






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






11. 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






12. The final event to complete the investment - at which time all the legal documents are signed and the funds are transferred.






13. 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.






14. 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 -






15. 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






16. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything






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. The maximum amount of cash that a partner is required to contribute under the terms






19. 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






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






21. 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.






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






23. How you get out






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






25. 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






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






27. An acquisition of a business using mostly debt and a small amount of equity. The debt is secured by the assets of the business.






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






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






30. 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.






31. An IPO that has met certain






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






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






34. How much the company is worth before an investment






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






36. 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






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






38. 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






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






40. 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






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 method by which an investor will realize an investment.






43. 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






44. 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






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






46. 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






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






48. 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






49. The internal rate of return on an investment.






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






Can you answer 50 questions in 15 minutes?



Let me suggest you:

Browse all subjects

Browse all tests

Most popular tests



Major Subjects

Tests & Exams


AP
CLEP
DSST
GRE
SAT
GMAT

Browse all subjects

Browse all tests

Most popular tests