Deal flow = How many business proposals / start-up pitches / investment opportunities come to the VC
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20
Why is strong deal flow considered an advantage?
It increases the chance of discovering high-quality start-ups and selecting better investment opportunities.
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Explain 'board control' in "the least negotiable provisions for VC firms in descending order are prorata rights, liquidation preference, anti-dilution protection, valuation, board control, and vesting."
refers to how many seats on the company’s board of directors the investor receives
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20
Explain 'the least negotiable provisions' in "the least negotiable provisions for VC firms in descending order are prorata rights, liquidation preference, anti-dilution protection, valuation, board control, and vesting."
the contract terms venture capitalists are least willing to change or compromise on
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What three factors are the most important in value creation?
deal selection, deal sourcing, and post-investment value-added
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Explain 'vesting' in "the least negotiable provisions for VC firms in descending order are prorata rights, liquidation preference, anti-dilution protection, valuation, board control, and vesting."
a process giving employees the right to keep the shares, pension plans, etc. given to them by a company after working there for an agreed period
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Explain 'anti-dilution protection' in "the least negotiable provisions for VC firms in descending order are prorata rights, liquidation preference, anti-dilution protection, valuation, board control, and vesting."
a mechanism to protect an investor’s equity stake from being diluted during subsequent fundraising rounds where new shares are issued at a lower price per share
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15
Explain 'IPO'.
initial public offering: the first sale of a company's shares to the public
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15
What is the purpose of a term sheet?
It 'summarizes the VC’s conditions for a financing'
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Explain 'pro rata rights' in "the least negotiable provisions for VC firms in descending order are prorata rights, liquidation preference, anti-dilution protection, valuation, board control, and vesting."
the right, but not the obligation, that can be given to an investor to maintain their initial level of percentage ownership in a company during subsequent round
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15
Explain the term 'portfolio company'
A portfolio company is a company (public or private) that a venture capital firm, buyout firm, or holding company owns equity.
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Explain 'valuation' in "the least negotiable provisions for VC firms in descending order are prorata rights, liquidation preference, anti-dilution protection, valuation, board control, and vesting."
the act of deciding how much money something is worth, or the amount decided
