Which of the following is true about venture capitalists (VCs)?
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Correct Answer:
VCs are generally not interested in seed-stage investments.
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______ is a rigorous process which involves evaluating an investment opportunity prior to the contract being signed.
Answer
Correct Answer:
Due diligence
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A type of professional investor who generally invests in early-stage and emerging companies because of perceived long-term growth potential is called a ______.
Answer
Correct Answer:
venture capitalist
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What is the best definition of convertible debt?
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Correct Answer:
A short-term loan that can be turned into equity when future financing is issued.
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In which year did a financing rule allow pension funds to invest in venture capital for the first time?
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Correct Answer:
1979
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Which of the following is true with respect to the financing process?
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Correct Answer:
Approximately 80% of entrepreneurs are forced to relinquish their CEO roles.
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______ are individuals who are usually former business executives, often from big multinationals, looking to use their savings or current income to invest.
Answer
Correct Answer:
Corporate angels
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Which of the following is the best definition of equity financing?
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Correct Answer:
The exchange of ownership interest in exchange for cash investment.
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The founders of Google were willing to have little control over their company in exchange for financial gains that are close to potential. After this trade-off they would be classified as ______.
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Correct Answer:
rich
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______ financing consists of larger amounts of funds provided for companies that have a team in place and a product or service tested or piloted, but shows little or no revenue.
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Correct Answer:
Early-stage
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______ is a type of angel investor that has already successfully started and operated their own business, which they may or may not still be running.
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Correct Answer:
Entrepreneurial angel
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Which of the following is true about angel investors?
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Correct Answer:
Angels teach entrepreneurs valuable business strategies that go beyond funding.
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“What are the drivers that are fueling the growth?,” “How is the company positioned against competitive threats?,” and “What is the distribution channel and who controls it?” are questions associated with this step in the due diligence process.
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Correct Answer:
market
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A less common exit strategy that allows the entrepreneur an opportunity to repurchase stock from a venture capital firm at cost plus a premium is called ______.
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Correct Answer:
buyback
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_____ financing usually consists of small or modest amounts of capital provided to entrepreneurs to prove a concept.
Answer
Correct Answer:
Seed stage
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A type of professional investor who generally invests in early-stage and emerging companies because of perceived long-term growth potential is known as
Answer
Correct Answer:
Venture Capitalist (VC)
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Unicorn is a tech startup company that has received a ______ as determined by private or public investment.
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Correct Answer:
$1 billion valuation,
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A stage of financing in which the money is provided to entrepreneurs to enable them to implement the idea by funding product research and development is known as?
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Correct Answer:
Startup Financing
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A company’s first opportunity to sell stocks on the stock market to be purchased by members of the _______.
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Correct Answer:
General public
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The sale of shares of stock in exchange for cash is known as?
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Correct Answer:
Equity Financing
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Early-Stage Financing is a stage of financing that involves ________ that have a team in place and a product or service tested or piloted, but have little or no revenue.
Answer
Correct Answer:
larger funds provided for companies
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process that involves evaluating an investment opportunity prior to the contract being signed is known as?
Answer
Correct Answer:
Due Diligence
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Debt Financing that is expected to be paid back with interest at a designated point in the future.
Answer
Correct Answer:
True
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A short-term loan that can be turned into equity when future financing is issued.
Answer
Correct Answer:
Convertible Debt
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which type of investor who uses his or her own money to provide funds to young startup private businesses run by entrepreneurs who are neither friends nor family
Answer
Correct Answer:
Angel Investor
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Tick Correct statement about Accredited Investors .
Answer
Correct Answer:
Investors who earn an annual income of more than $200,000 or have a net worth of more than $1 million.
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