Podcast
Questions and Answers
What is true
What is true
- Generally speaking, VC invest before angel investors and before private equity firms
- Generally speaking, VC invest before angel investors but after private equity firms
- Generally speaking, VC invest before private equity firms but after angel investors (correct)
Which of the following options are a downside of using Net Present Value?
Which of the following options are a downside of using Net Present Value?
- Includes Real options
- Dynamic assumptions
- Sensitive to discount rate (correct)
- Multiple IRRs
What does the normative perspective of risk entail
What does the normative perspective of risk entail
- Rational decision-making (correct)
- Irrational decision-making
- Imperfect decision-making
- Sensitivity-based decision
Which of the following statements most accurately describe a VC?
Which of the following statements most accurately describe a VC?
What is net invested capital?
What is net invested capital?
Zero Ventures has raised their $50M fund, Zero Ventures 1, with management fees computed
based on committed capital. These fees are 2.5 percent per year in the first five years of the fund,
then fall by 75 basis points in year 6 and stay on that level for the subsequent five years. The fees
will be paid quarterly, with equal installments within each year. Given this description: What are the lifetime fees?
Zero Ventures has raised their $50M fund, Zero Ventures 1, with management fees computed based on committed capital. These fees are 2.5 percent per year in the first five years of the fund, then fall by 75 basis points in year 6 and stay on that level for the subsequent five years. The fees will be paid quarterly, with equal installments within each year. Given this description: What are the lifetime fees?
What is the investment capital based on the previous question?
What is the investment capital based on the previous question?
Alpha Ventures is considering two alternative carry structures for its AV2.
- 25% carry with a basis of all committed capital
- 20% carry with a basis of all investment capital
Committed capital = $200M
Management fees = 2% of committed capital every year
Fund duration = 10 years
Suppose total cumulative distributions for 10 years = $325M.
How much carry would the GP get under:
Alternative 1
Alpha Ventures is considering two alternative carry structures for its AV2.
- 25% carry with a basis of all committed capital
- 20% carry with a basis of all investment capital Committed capital = $200M Management fees = 2% of committed capital every year Fund duration = 10 years Suppose total cumulative distributions for 10 years = $325M. How much carry would the GP get under:
Alternative 1
Alternative 2
Alternative 2
What is true
What is true
