Question 1

Which venture capital firm, founded in 1972, is famous for early investments in tech giants like Apple, Google, PayPal, and WhatsApp?

Accepted Answer

Sequoia Capital

Question 2

What is the primary benefit of a 'liquidation preference' for a venture capital investor in a startup's exit scenario?

Accepted Answer

It ensures the investor receives a certain multiple of their original investment back before common shareholders get paid.

Question 3

What term describes a subsequent funding round for a startup where the company's valuation is lower than its valuation in the previous funding round?

Accepted Answer

Down Round

Question 4

What is a 'convertible note' in the context of startup fundraising?

Accepted Answer

A debt instrument that converts into equity at a later date, usually at a discount to the valuation of a future funding round.

Question 5

What is a 'cap table' in the context of a startup's ownership structure?

Accepted Answer

A spreadsheet or document that details the ownership stakes (equity) of all shareholders in a company.

Question 6

What is the 'IRR' (Internal Rate of Return) primarily used for in venture capital?

Accepted Answer

To measure the profitability and performance of a venture capital fund or individual investment.

Question 7

Which clause in a venture capital term sheet protects investors from dilution if the company issues new shares at a lower valuation in a future funding round?

Accepted Answer

Anti-dilution provision

Question 8

Founded in 1972, which Silicon Valley venture capital firm is often cited as one of the pioneers of the modern venture capital industry, known for early investments in companies like Apple and Sun Microsystems?

Accepted Answer

Kleiner Perkins

Question 9

What is 'TVPI' (Total Value to Paid-In Capital) as a metric for venture capital fund performance?

Accepted Answer

A multiple that measures the total value generated by a fund (realized and unrealized) relative to the total capital invested by LPs.

Question 10

Which specific stage of funding comes after the Seed round but typically before a Series A, often focusing on proving a business model or achieving product-market fit?

Accepted Answer

Pre-Seed round

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