Question

QUESTION 26

Entrepreneurs will never give the Venture Capitalists the right to participate in determining key corporate decisions. This would give the Venture Capitalists to much power to dictate the development of the company.

True

False

QUESTION 27

The right of first refusal and co-sale clause in a term sheet will address the rights of a Venture Capitalist to either sell or buy shares at the same terms as a proposed sale or purchase by a founder or other shareholder.

True

False

QUESTION 28

Anti-dilution protections are used to protect founders from venture capitalists who attempt to buy a larger share of the company than the founders are willing to sell.

True

False

QUESTION 29

Clauses in the term sheet will attempt to ensure that the interests of the founders are aligned with the interests of the investor.

True

False

QUESTION 30

Use the “YIELD” function in Excel to find the yield to maturity of a bond with the following characteristics. The yield to maturity on this bond is 5%.

Settlement	5/17/2018
Maturity	5/17/2028
Rate	5%
Price	100
Redemption	100
Frequency	2
Basis	0

True

False

Answer 1

26. FALSE......A venture capitalist is not onboard easily and as per the data, there are only 1% of the entrepreneurs who could raise funds for their company from Venture Capitalists. Also, in the decision making their contribution is decided prior to transferring the funds to the company's account.

27. TRUE....... As per first refusal and co-sale clause, the VC or founder if want to sell or buy the shares then he needs to first offer it to the company and the company has a right to refuse the opportunity and the deals will be done at the same terms.

28. FALSE....although it protects the founder from equity dilution but it protects it from issuing the later stocks at lower prices because it will indirectly dilute the share of the investors.

29. TRUE

30. TRUE