Venture Capital, Finance And Accounting

Question: Why would a teachers' pension fund, a seemingly conservative pool of capital, invest in a venture capital firm?
A
They are secretly trying to generate income without letting the teachers know.

B
The investment in a venture capital firm is most likely a small, though the riskiest, portion of their overall portfolio.

C
They don't see it as risky and trust the venture capital firm to generate big returns.

D
There are no laws protecting the teachers; so the pension fund can invest as they deem fit.

Note: Answer not sure
1. Report
Question: What is the approximate size of the venture capital industry in 2009?
A
More than $30 billion

B
Less than $5 million

C
More than $1 trillion

D
Approximately $1 billion

Note: Answer not sure
1. Report
Question: Why do venture capitalists invest in multiple industries instead of focusing on one specific industry?
A
They have more money than any one industry; so they have to invest in several to invest it all.

B
They want to diversify their risk.

C
They are required to by the SEC.

D
There are tax advantages for investing in several industries.

Note: Answer not sure
1. Report
Question: Why do few target companies make it past the initial screening?
A
Because venture capitalists prefer to invest in only one company at a time

B
Because venture capitalists have strict requirements

C
Because the number of applicants is very large

D
Because of the large number of applicants and strict investing criteria of the venture capitalists

Note: Answer not sure
1. Report
Question: Why is the corporate structure important to the venture capital firm and part of the due diligence process?
A
Because venture capitalists want the easiest to form structure

B
Because corporate structure can have legal implications and depending on the business model of the target company, different corporate structures will be more applicable

C
Because accounting rules differ based on the structure of the company

D
Because it is easier to exit from an LLC than a C Corporation

Note: Answer not sure
1. Report
Question: Which of the following would be done in the final stage of the due diligence process, once the company has passed the first round of due diligence?
A
Internal discussion to evaluate the potential of the target company

B
Detailed analysis of the management team and their capability

C
External research into the target company's industry

D
Consultations with the advisors to the venture capital firm about the potential target investment

Note: Answer not sure
1. Report
Question: Why do venture capitalists typically involve themselves in an equity base rather than debt?
A
Because it is easier to structure a deal

B
Because it is easier to exit the investment

C
Because they want to participate in the growth of the companies they are investing in, which typically have a high growth potential

D
Because it is less risky than debt

Note: Answer not sure
1. Report
Question: Why is an experienced management team critical for a new company?
A
It is difficult to navigate a new company towards success. A strong management team is likely to be more successful.

B
It brings in key stakeholders who won't leave early on.

C
It guarantees success.

D
Venture capitalists prefer to talk to people who talk the language rather than rookies.

Note: Answer not sure
1. Report
Question: Who ultimately decides to progress through the evaluation process?
A
An individual partner at the venture capital firm

B
A team from the venture capital firm working together

C
An advisory team outside of the venture capital firm

D
A lower level due diligence specialist

Note: Answer not sure
1. Report
Question: Which of the following would be done in the preliminary due diligence?
A
Checking on the management team and their credentials

B
Legal investigation

C
Verifying the financial projections of the target

D
External research on the target investment and their industry

Note: Answer not sure
1. Report

First Prev 5 6 7 8 Next Last

Question: Why would a teachers' pension fund, a seemingly conservative pool of capital, invest in a venture capital firm?

Question: What is the approximate size of the venture capital industry in 2009?

Question: Why do venture capitalists invest in multiple industries instead of focusing on one specific industry?

Question: Why do few target companies make it past the initial screening?

Question: Why is the corporate structure important to the venture capital firm and part of the due diligence process?

Question: Which of the following would be done in the final stage of the due diligence process, once the company has passed the first round of due diligence?

Question: Why do venture capitalists typically involve themselves in an equity base rather than debt?

Question: Why is an experienced management team critical for a new company?

Question: Who ultimately decides to progress through the evaluation process?

Question: Which of the following would be done in the preliminary due diligence?