Venture Capital and Private Equity Module (Intermediate) Practice Exam

Venture Capital and Private Equity Module (Intermediate) Practice Exam

In recent years, small and medium enterprises (SMEs) have gained increasing recognition for their vital role in driving economic growth. However, they often encounter greater financial challenges compared to larger firms. Venture capital and private equity have become essential in addressing these challenges by providing crucial funding, especially to innovative SMEs, thereby promoting economic development and innovation. Private equity has established itself as a core element of a strong entrepreneurial ecosystem, serving as a significant funding source for startups, expanding businesses, and acquisition deals.

The Venture Capital and Private Equity Module (Intermediate) exam aims to equip candidates with a clear understanding of the role of private equity in the economy, the differences between various early-stage financing options, the structure and operations of private equity funds, and the range of post-investment support services that come with private equity capital.

Who should take the exam?

The exam is beneficial for:

• Students
• Finance Professionals
• Entrepreneurs
• Employees of SMEs
• Anyone having in interest in this subject

Exam Details

• Exam Name: Venture Capital and Private Equity Module (Intermediate)
• Exam Languages: English
• Exam Questions: 70 Questions
• Time: 120 minutes
• Passing Score: 60%

Exam Course Outline 

The Venture Capital and Private Equity Module (Intermediate) Exam covers the given topics:

Topic 1: Understand Private Equity Background

• Evolution of Finance for Business
• VC Funds and PE Funds
• Fund Structure
• Leveraging in Funds
• Forms of Investment by Funds
• J Curve
• Measuring the Performance of Investments and PE Fund

Topic 2: Getting Ready for Growth Capital from Funds

• PE Investment Criteria
• Role of Facilitators
• Resource Mobilization, Valuation & Dilution

Topic 3: Learn about Business Model, Business Plan & Financial Model

• Business Model
• Business Plan
• Financial Model
  • Background o Assumptions
  • Cost of Project & Means of Financing
  • Projected Profit & Loss Account
  • Projected Balance Sheet
  • Projected Funds Flow
  • Project IRR
  • Equity IRR
  • Loan Servicing Capability
  • Valuation
  • Sensitivity Analysis
  • Building Scenarios

Topic 4: Understand Buyouts and other Transactions

• LBO
• MBO
• Project-based Funding Transactions
• Distressed Assets Funding Transactions

Topic 5: Learn about PE Investment Process

• Sourcing of Proposals
• Initial contact / Flier
• Non-Disclosure Agreement (NDA)
• Information Memorandum
• Management Presentation
• Initial Due Diligence
• Preliminary Investment Note
• Non-binding Letter of Intent
• Final Due Diligence
• Final Investment Memorandum
• Signing the Term Sheet
• Closure of the Deal

Topic 6: Learn about Documentation and Typical Investment Conditions

• Typical Investment Conditions
• Subscription Agreement
• Shareholders’ Agreement

Topic 7: Understand Tax Aspects of PE Investment

• Section 10(23FB) of Income Tax Act, 1961
• Section 10(47) of Income Tax Act, 1961
• Income Types
• Securities Transaction Tax (STT)
• Tax on Distributed Profit (Dividend Distribution Tax)
• Taxability of Interest
• Taxability of Short Term Capital Gains on Debt
• Taxability of Long Term Capital Gains on Debt
• Taxability of Short Term Capital Gains on Equity
• Taxability of Long Term Capital Gains on Equity
• Taxation of Non-Residents

Topic 8: Understand Post-Investment Support, Monitoring and Exit

• Support
• Monitoring
• Exit

Topic 9:  EMERGE: NSE’s Platform for SMEs

• Emerge Introduction
• Benefits of Listing for Companies
• Benefits of Listing for Investors
• Eligibility Criteria
• Listing Requirements
• Listing Fees
• Selecting a Merchant Banker for the Issue
• Role of Merchant Bankers in Emerge
• Role of Market Makers in Emerge
• The Emerge Trading Platform