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. 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.






2. How you get out






3. 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






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






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






6. 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






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






8. Term sheet for equity offering






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






10. How much the company is worth before an investment






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






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






13. 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.






14. 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






15. 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






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






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






18. 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.






19. No double tax - Limited number of investors






20. 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.






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






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






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






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






25. 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.






26. 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






27. Cannot get other outside investors-No Shop






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






29. The internal rate of return on an investment.






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






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






32. 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






33. An IPO that has met certain






34. 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






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






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






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






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






39. 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.






40. 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






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






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






43. The amount of this available to a management team for venture investments.






44. 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






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 way you buy stock






47. 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.






48. The method by which an investor will realize an investment.






49. 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






50. 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.