Venture Capital
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Venture Capital
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25 Questions

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

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

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

4. A business owned by stockholders who share in its profits but are not personally responsible for its debts

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

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

7. 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

8. 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

9. 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.

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. It refers mainly to insurance companies - pension funds and investment companies collecting savings and supplying funds to markets - but also to other types of institutional wealth (e.g. endowments funds - foundations etc.).

12. 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.

13. How you get out

14. Allows the holder to choose whether a merge or sale will be treated as a liquidation event for the purpose of receiving the funds they are entitled to under the liquidation preferences of the term sheet

15. An IPO that has met certain

16. A financial institution specializing in the provision of equity and other forms of long-term capital to enterprises - usually to firms with a limited track record but with the expectation of substantial growth. The venture capitalist may provide bot

17. 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.

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

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

20. 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.

21. 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.

22. 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

23. 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

24. 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

25. 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.