CH 15

The process of exiting the privately held business venture to unlock the owners' investment value is known as harvesting.

• True

• False

When an initial business plan is prepared, attention should be paid to the investors' and founders' desire for eventual liquidity by anticipating a harvest for the venture investors.

• True

• False

Which of the following is not a way to harvest a venture?

• systematic liquidation

• outright sale

• bankruptcy

• going public

The type of agreement with an investment bank involving the investment bank's underwritten purchase and resale of securities is called:

• firm commitment

• best efforts commitment

• due diligence

• making a red herring disclaimer

• a private placement

The negotiated period around an equity securities offering during which insiders are prohibited from selling their existing shares is called:

• a seasoned offering

• an unseasoned offering

• underpricing

• an underwriting spread

• a lockup provision

An order to purchase stock that can be executed only at a specified price or better is called a:

• market order

• limit order

• stop order

• stock order

• private order

In the aftermarket trading for the venture's securities, an order that converts to a market order once a certain price is achieved is known as a:

• put order

• market order

• limit order

• stop order

The arrangement where an underwriter has the option of selling additional shares when the issue is heavily oversubscribed is known as

• green shoe

• red herring

• best efforts

• lockup

from selling securities to public investors and what they pay to the issuing firm is known as:

• IPO underpricing

• due diligence

• firm commitment

• best efforts

• underwriting spread

An agreement with an investment bank that involves the purchase and distribution of new securities is known as:

• due diligence

• firm commitment

• best efforts

• underwriting spread

• IPO underpricing