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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. 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.






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






3. 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.






4. Term sheet for equity offering






5. Letter of intent summarizing the key legal and financial terms






6. 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.






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






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






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






10. 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






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






12. 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






13. 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






14. 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






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






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






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






18. An IPO that has met certain






19. An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.






20. The residual ownership in a company like a corporation or LLC 51%=control






21. 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






22. 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






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






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






25. This refers to obtaining capital from investors or venture capital sources.






26. How you get to vote






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






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






29. How you get out






30. 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.






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






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






33. 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






34. 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.






35. No double tax - Limited number of investors






36. The way you buy stock






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






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






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






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






41. 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






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






43. 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






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






45. 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.






46. 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






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






48. The internal rate of return on an investment.






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






50. 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