VCPE Quiz

Mr. Vikas has to developed an E-Commerce portal for handicraft products and has approached his father's friend Mr. Rajsinghania for financing his new project on a larger level. Mr. Singhania is famous name in the E-Com world known for experience and business sense. He knows Vikas since his early years and has confidence that with proper guidance and some networking Vikas will be able to succeed in any modern IT based business. Thus, he agrees to help Vikas in his project. What is the nature of investment of Mr. Singhania in Vikas's project.

• Business Incubator

• Venture Capital

• Private Equity

• Angel Investor

Ms. Kavita is a full-time CFO in Godrej Ltd, Mumbai, Maharashtra. and is also a board of member in the company. She has an impeccable sense of economics and business opportunities and hence as been approached by Accel Partners (a VC Firm) to head the Research and Finance Deparment its South India Team and its complete responsibilities. Due to personal reseons Ms. Kavita does not want to leave her existing job at Godrej anywhere in the near future. Under such circumstances, the appointment with Accel Partners _______________ by Ms. Kavita.

• Should be accepted

• Should not be accepted

• Should be kept on hold

• Should be merged with Godrej's job description.

Private equity is covered under Category ______________ of AIF as per SEBI regulations.

• I

• II

• III

• IV

Nourishment Capital is a PE firm that has specialized in providing funds for new ventures in the field of manufacturing fiber optic cables. Its a mid-size PE firm with an average corpus of Rs. 5 Crores and risk capacity of 45%. Mr. Tanna is wants to open a large manufacturing unit to produce the world strongest, lightest, faster and most thin fiber optic cable. His business plan is very sound and well designed. To set up this entire manufacturing unit a total of Rs. 4 Crore is required of which Mr. Tanna can contribute Rs. 1 Crore. In the light of the given case, decide the status of investment for Nourishment Capital.

• Nourishment Capital cannot invest in this project

• Nourishment Capital must invest in this project

• Nourishment Capital must redesign and then invest project

• Nourishment Capital should simply ignore.

Out of the following which of the clauses of the Term Sheet are legally binding on the VC firm towards its Investee Firm?

• Valuation Principles

• Conversion Rights

• Dividend Rights

• Confidentiality

The principle of due deligience is applicable to which of the following stages in the VC Cycle?

• Investment

• Monitoring

• Exit

• Every

Mr. N.N Pandey is has approached Kapital India, a VC Firm, for financing its Rs. 2 Crore project on Pollution Management Equipments. Its a very promising project and hence Kapital India wants to make the best of this opportunity. But 85% of its total corpus of Rs. 10 Crores is involved in financing other projects. For this reason Kapital has approached a bank for a loan of Rs. 50 Lakhs. Thus the VC firm wants to invest Rs. 2 Crores of which Rs. 50 Lakhs are borrowed from bank. Suggest the nature of investment.

• The investment is void ab initio

• The investment is in the form of Mezzanine Funding

• The investment is in the form of Leveraged Boyout

• The investment is in the form of Growth Funding

The minimum rate of return to be earned by the fund before the General Partner can earn his carried interest is known as _______________.

• Interest Rate

• Commission Rate

• Hurdle Rate

• Management Fee

Ms. XYZ a PE firm has invested in shares of Nest Pvt. Ltd. since the past 3 years. Its investment will be maturing after 4 more years. But XYZ wants to trade its shareholding in Nest Pvt. Ltd. The trading of securities is _______________.

• Allowed but not recommended

• Recommended

• Allowed as well as recommended

• Not Allowed

The proceeds of the investment after the exit are distributed to the limited partners _______________.

• After the share of general partners

• Before the share of general partners

• annually

• not distributed at all.