Term
| The return to venture investors directly depends on which of the following? |
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Definition
| both a and b, venture’s ability to generate cash flows, ability to convince an acquirer to buy the firm |
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Term
| To obtain the percent ownership to be sold in order to expect to provide the venture investor’s target return, one must consider the: |
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Definition
| cash investment today and the cash return at exit discounted by the venture investor’s target return, then divide today’s cash investment by the venture’s NPV |
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Term
| The value of the existing venture without the proceeds from the potential new equity issue is known as? |
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Definition
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Term
| The value of the existing venture plus the proceeds from the potential new equity issue is known as? |
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Definition
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Term
| Financing provided in sequences of rounds rather than all at one time is known as? |
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Definition
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Term
| For early stage ventures, which of the following is a strong reason for having an equity component in employee compensation? |
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Definition
| both a and b, the expected deferred and tax-preferred compensation allows the venture to pay a lower current compensation to employees, as a way to motivate employees to strive for the same goal of high equity value |
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Term
| A P/E multiple refers to: |
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Definition
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Term
| The two “just-in-time” capital methods are: |
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Definition
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Term
| When a firm has growth that only meets, rather than exceeds, the cost of capital, we would expect its price-earnings multiple to be approximately equal to: |
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Definition
| the reciprocal of its required return on equity |
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Term
| For the typical venture investing project, the valuation will be highest under: |
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Definition
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Term
| During the exit period, which of the following will have last crack at the venture’s wealth? |
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Definition
| initial equity investors of the venture |
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