Enfb 4190 Test 2 Questions With Complete Solutions

Raising Money Order {Ans: FFFF → Individual Angels → Angel Networks → Regional Venture Capital → National Venture Capital → Private Equity → IPO}Pre-money valuation {Ans: Projected revenues * industry multiple = future valuation - 3rd year revenue projection * industry multiple Future Revenue / Desired Return = Current Valuation}Seed Stage {Ans: Amount: $15k - $500k Source: Friends / Family / Founders / Fools (FFFF) / Accelerators Stage: Feasibility Study Mgt team: Founder Valuation: Less than $1m}Piggyback Registration Rights {Ans: - Rights to register the holders stock with the SEC - Cannot demand their stock to be registered - Allows their stock to be registered when the company has to register with the SEC}2/20 plan {Ans: Plan on how venture capital makes money: 2% of the invested capital per year becomes the management fee 20% profit's interest}Key Man Life Insurance {Ans: - Life insurance purchased by the company to insure key members in case they pass away - The need for this decreases as the management team expands}