Exam 12: Informal Risk Capital, venture Capital, and Going Public

For a company to go public,larger underwriting firms have more stringent criteria,such as sales as high as $50 million to $100 million,and a 40 to 70 percent annual growth rate.

The shorter the time before a company goes public,given that profits and sales growth occur,the less percentage of equity the entrepreneur will have to give up per dollar invested.

The factor approach:

The public equity market is available only for high-potential ventures.

Which factor in valuing your company is the most important?

Using the __________ method of evaluating the firm,cash flow is adjusted for the time value of money.

In 2011 venture capital deals were concentrated in the three areas of software,biotechnology and industrial/energy.

Venture capital firms are pools of equity managed by large corporations.

Venture capital firms generally prefer a minimum funding level of $100,000.

List three reasons why a Business Angel may reject a proposal.

Venture capitalists:

Most venture capital deals have been made in California and Massachusetts.

Endowment and pension funds can be part of venture capital equity pools.

When there is a significant disparity between the offering price of the shares and the price paid for shares by officers,directors,or founding stockholder,this issue is addressed in the:

In the venture-capital process,______ is (are)absolutely essential for preliminary screening.

There is more risk involved in financing a business's early operations,therefore,higher rates of return are expected.

Making long-term decisions can be difficult in publicly traded companies where sales and profit evaluations indicate the capability of management via stock values.

Early-stage financing is usually the least costly type of financing to obtain.

What are the three types of risk capital markets?

The best source of funds for first-stage financing is the: