Venture Capital, Finance And Accounting

Question: How long does the initial due diligence process last?
A
4 to 6 weeks

B
1 to 2 weeks

C
10 to 12 weeks

D
Any duration from 1 week to a year

Note: Not available
1. Report
Question: When does the target company actually receive the investment?
A
Mid way through the process

B
Usually within two weeks from the start of the process

C
After the legal closing, on a stipulated closing date

D
They never receive the full amount and have to request disbursements weekly

Note: Not available
1. Report
Question: What is the minimum that a venture capitalist would expect at the monthly board meeting?
A
Detailed financial statements, explaining the expenses line by line

B
That the company invested in is meeting the goals stipulated in the negotiation process, and if not, has an action plan to rectify

C
An exciting presentation by the CEO

D
Meeting with individual employees

Note: Not available
1. Report
Question: Does a venture capital exit have any negative impact on the original founders of the company?
A
Yes; it will definitely drive down the value of the company.

B
Typically no; the exit just means the end of a successful relationship.

C
Yes; the employees will question why the venture capitalist is now exiting.

D
No; it will usually bolster the stock price.

Note: Not available
1. Report
Question: What is meant by "screening" in the investment process?
A
Online submission of the business plan by the target company

B
Initial examination of the potential investment by the venture capitalist to see whether it fits in their portfolio

C
The meet and greet meeting held after the venture capitalist has expressed interest in the target company

D
Examination of the target company by the legal team

Note: Not available
1. Report
Question: What is the attraction of convertible debt to a venture capitalist?
A
It allows them to gain more control over the firm.

B
It gives them the potential to hold debt or equity, depending on how the firm grows and what will be most profitable.

C
It allows them to liquidate more easily.

D
It limits any risk.

Note: Not available
1. Report
Question: What is the average size of a venture capitalist's investment in a target company?
A
From 1 million to 50 million dollars

B
From 100 thousand to 1 million dollars

C
At least 50 million dollars

D
There is no limit

Note: Not available
1. Report
Question: What is a Term Sheet?
A
It is a document which stipulates the term of the investment.

B
It is a document which the company receiving funding prepares, stating what their expected revenues for the upcoming years are.

C
It is another term for "executive summary".

D
It is a document which stipulates the venture capital firm's terms for the investment, such as the amount they will invest, the percentage of equity they require in exchange for the investment, and their expectations of the company they are investing in.

Note: Not available
1. Report
Question: Which of the following would be a red flag for a venture capitalist?
A
No one else has entered the market space.

B
All the members of the management team come from different backgrounds.

C
Several competitors have entered and left the market due to low traction.

D
The company hasn't yet talked to other venture capitalists.

Note: Not available
1. Report
Question: Why is personal rapport important?
A
No one wants to work with someone who is all business no play.

B
It is not. It is just a small factor in the decision. Profitability is most important.

C
Nice people tend to do better in negotiations than mean people.

D
The target company and the venture capitalist will be in business together for several years and need a good working relationship.

Note: Answer not sure
1. Report

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Question: How long does the initial due diligence process last?

Question: When does the target company actually receive the investment?

Question: What is the minimum that a venture capitalist would expect at the monthly board meeting?

Question: Does a venture capital exit have any negative impact on the original founders of the company?

Question: What is meant by "screening" in the investment process?

Question: What is the attraction of convertible debt to a venture capitalist?

Question: What is the average size of a venture capitalist's investment in a target company?

Question: What is a Term Sheet?

Question: Which of the following would be a red flag for a venture capitalist?

Question: Why is personal rapport important?