1. Which of the following is a form of "Up Round" dilution protection that allows existing investors to maintain their percentage ownership in the company during future financing rounds?
2. What is the purpose of a Right of First Refusal (ROFR) in an investment agreement?
3. What is FOMO in the context of investing during a bull market?
4. Which of the following liquidation protections gives the investor the right to require the company to buy back their shares at a certain price or within a certain timeframe?
5. During a bear market, which of the following becomes more prevalent in funding rounds, indicating that deals are chasing money?
6. Which party is particularly concerned about ensuring the availability of adequate resources to shape the destiny of the business?
7. In a priced round led by a venture capital firm, what is one of the key responsibilities of the lead investor?
8. Venture Investor A (VIA) owns 1,000,000 shares priced at $1.50 per share in StartupX. A year later, StartupX raises $2,000,000 by issuing 4,000,000 new shares. If VIA has “Weighted Average” Anti-Dilution Protection, how many more shares will VIA receive at the closing of the 2nd investment?
9. What is a shared need for all parties in an investment partnership regarding the distribution of proceeds at the time of exit?
10. What is the primary purpose of issuing warrants in an investment deal, especially when a founder demands a high valuation?
11. What is the primary purpose of a term sheet in the context of a priced round?
12. Why is downside protection particularly crucial for venture capital investors in comparison to other investors?
13. Venture Investor A (VIA) owns 1,000,000 shares priced at $1.50 per share in StartupX. A year later, StartupX raises $2,000,000 by issuing 4,000,000 new shares. If VIA has “Full Ratchet” Anti-Dilution Protection, how many more shares will VIA receive at the closing of the 2nd investment?
14. Which control provision in a startup investment agreement gives investors the right to attend and observe board meetings but not participate or vote?
15. Which party seeks honesty, ethical behavior, and adequate information for making informed investment decisions?
16. Why might founders be hesitant to agree to "up round" dilution protection terms in a term sheet?
17. In a scenario with Tag Along Rights, what do minority shareholders have the right to do when a majority shareholder decides to sell their shares?
18. What is a primary concern of venture capitalists (VCs) that differentiates them from founders and angels?
19. What is a key need shared by both founders and investors in a successful partnership?
20. Approval rights in a startup investment agreement give investors the authority to make decisions related to which of the following aspects of the company?
21. Why do investors need liquidity protection and exit strategies for their private securities investments?
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