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. This refers to obtaining capital from investors or venture capital sources.
Post-Money Valuation
liquidation
Common Equity
raising capital
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.
Bootstrapping
Liquidation Preference
Venture Capital Financing
leverage buy-out(LBO)
3. 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)
equity financing
turnaround
Outstanding Stock
4. 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
private equity
term sheet
Cash-out election
recapitalization
5. The way you buy stock
IPO (Initial Public Offering)
Preferred Stock
PPM
capital gain
6. 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
Elevator Pitch
Deal Structure
IRR
Equity
7. Funds provided to enable an enterprise to acquire another enterprise or product line or business.
executive summary
buyout
Preferred Stock
No Shop/Confidentiality
8. The company or entity into which a fund invests directly.
S Corporation
equity financing
portfolio compaay
Qualified IPO
9. 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.
Equity
Pre-Money Valuation
Qualified IPO
follow-on
10. Document between general and limited partnership of each fund spells out details of the partnership.
exit
Lead Investor
Limited Partnership Agreement
Preferred Stock
11. The equity ownership in a LLC. May be either common or preferred. Partnership agreement
Business Plan
Qualified IPO
Stock Price Agreement
Membership Interest
12. Investments by a private equity fund in a publicly traded company - usually at a discount.
Anti-Dilution Protections
exit route
Market Capitalization
private investment in public equities (PIPE)
13. 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
Preferred Stock
Business Plan
Capital Call 'Drawdown'
Due Diligence
14. The party that manages a limited partnership and is liable for the debts of the company
Venture Capital Financing
portfolio compaay
General Partner (GP)
secondary purchase
15. An investment vehicle designed to invest in a diversified group of investment funds.
fund of funds
IPO (Initial Public Offering)
syndication
due diligence
16. 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.
term sheet
raising capital
Pre-Money Valuation
C Corporation
17. First to absorb losses. Represents common shareholders' investment in a company. It includes common stock value - retained earnings - capital surplus.
Bridge Financing
recapitalization
Deal Structure
Common Equity
18. 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
private equity
bridge loans
Restricted Shares
acquisition
19. When an investor sells a stock - bond or mutual fund at a higher price than he or she paid for it.
closing
capital gain
Liquidation
Voting Rights
20. 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
small business investment companies (SBIC)
C Corporation
recapitalization
Subordinated Debt
21. The investigation and evaluation of a management team's characteristics - investment philosophy - and terms and conditions prior to committing capital to the fund.
mezzanine financing
due diligence
Business Summary
Liquidation
22. 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.
capital gain
secondary public offering
secondary purchase
Common Equity
23. Issue of shares of a company to the public by the company (directly) for the first time.
IPO(initial public offerings)
closing
Dividends
C Corporation
24. An IPO that has met certain
Common Stock
Qualified IPO
due diligence
Senior Stock
25. 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
series a preferred stock
Bridge Financing
leverage buy-out(LBO)
term sheet
26. Term sheet for equity offering
Deal Structure
Term Sheet
C Corporation
Common Equity
27. Compound internal rate of return.
raising capital
IPO (Initial Public Offering)
IPO(initial public offerings)
IRR
28. 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.
going private
management buy-out (MBO)
secondary public offering
Internal Rate of Return
29. Raising funds by offering ownership in a corporation through the issuing of shares of a corporation's common or preferred stock.
equity offerings
Membership Interest
fund of funds
seed capital
30. Purchase of a business by an outside team of managers who have found financial backers and plan to manage the business actively themselves.
Liquidation
Pre-Money Valuation
management buy-in (MBI)
C Corporation
31. Cannot get other outside investors-No Shop
management buy-out (MBO)
Term Sheet
No Shop/Confidentiality
IRR
32. 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.
Preferred Stock
angel investors
Limited Partner
Restricted Stock
33. Pre-money valuation plus the amount invested in the latest round
Outstanding Stock
Post-money
institutional investors
Pre-money valuation
34. Unsecured debt - junior to senior debt (bank loan) and is senior to common stock and preferred. Gets paid last
Subordinated Debt
Voting Rights
Term Sheet
Confidentiality
35. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity
Anti-Dilution Protections
turnaround
Capital
Warrants
36. Are the means by which an investor preserves its percentage of ownership in the company without having to make a new investment.
Bootstrapping
Anti-Dilution Protections
private investment in public equities (PIPE)
secondary purchase
37. 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.
lock-up period
private equity
Anti-Dilution Protections
benchmarks
38. 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.
Capitalization Table
IRR
Private Equity
syndication
39. 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.
Liquidation Preference
Anti-Dilution Protections
Bridge Financing
capital under management
40. 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
recapitalization
Conversion Rights
venture capital
equity financing
41. The equity ownership in a corporation. Also has basic voting rights
Common Stock
venture capital
secondary purchase
capital gain
42. 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
Liquidation Preference
capital under management
Bridge Financing
raising capital
43. 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
Preferred Stock
institutional investors
Senior Stock
Term Sheet
44. 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
bridge loans
Corporation (Limited liability and taxation)
Voting Rights
Due Diligence
45. The event in which the company is liquidated or sold (bankruptcy or sale to a public company)
Capital Commitment
Liquidity Event
Liquidation Preference
Closing
46. 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.
Venture Capitalist
Voting Rights
Restricted Stock
Bootstrapping
47. How you get out
management buy-out (MBO)
Liquidation Preference
Pre-money valuation
Seed Money
48. The rate of return or profit that an investment is expected to earn.
Internal Rate of Return
limited partnerships
Lead Investor
portfolio compaay
49. Used to compute net worth as the difference between total assets and total liabilities. adjusted value up to reflect market value
Voting Rights
closing
equity financing
Adjusted Book Value
50. 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.
portfolio compaay
Series A Preferred Stock
mezzanine financing
turnaround