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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. 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






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






3. How you get to vote






4. 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






5. 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






6. The reorganization of a company's capital structure. A company may seek to save on taxes by replacing preferred stock with bonds in order to gain interest deductibility.






7. 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.






8. 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






9. The internal rate of return on an investment.






10. 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 -






11. 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.






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






13. The repurchasing of all of a company's outstanding stock by employees or a private investor. As a result of such an initiative - the company stops being publicly traded. Sometimes - the company might have to take on significant debt to finance the






14. 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






15. The company or entity into which a fund invests directly.






16. 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.






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






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






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






20. Compound internal rate of return.






21. 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.






22. The equity ownership in a LLC. May be either common or preferred. Partnership agreement






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






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






25. 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.






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






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. Cannot get other outside investors-No Shop






29. 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.






30. 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






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






32. 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.






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






34. Corporation's first offer to sell stock to the public - Allows for anyone to buy stock and now falls under the SEC (No longer accredited investor) ...






35. The way you buy stock






36. 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.






37. Equity securities of companies that have not 'gone public' (are not listed on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are not listed on an exchange - any investor wishing to sell






38. 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






39. 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






40. An IPO that has met certain






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






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






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






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






45. 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.






46. 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






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






48. 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.






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






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