Drag-Along Rights are provisions that enable majority shareholders to compel minority shareholders to join in the sale of a company, ensuring the transaction proceeds smoothly without being blocked by minority stakeholders.
An add-on acquisition is a strategic move where a company acquires another company to bolster its capabilities or expand its market presence.
Asset stripping is the practice of buying a company with the intention of selling off its assets for a profit.
Beta is a measure of a stock's volatility in relation to the overall market, quantifying how much a stock's price moves in comparison to a market index, like the S&P 500.
Burn Rate is the speed at which a company uses its cash reserves before generating positive cash flow.
A Capitalization Table, or Cap Table, is a document that outlines the equity ownership of a company, detailing who owns what percentage, including founders, investors, and other stakeholders, and is essential for understanding a company's capital structure.
A convertible note is a type of short-term debt that converts into equity, typically in conjunction with a future financing round, allowing startups to raise initial funding without immediately determining the company's valuation.
Deal flow refers to the rate at which investment opportunities are presented to investors or financial professionals.
Disruptive technology is an innovation that significantly alters or replaces existing methods, products, or markets, often rendering them obsolete.
A down round occurs when a company raises capital at a valuation lower than its previous funding round, often signaling diminished investor confidence or a challenging market environment.
Early-stage financing is the initial capital provided to startups and young companies to help them develop their products and enter the market.
Exit valuation is the estimated financial worth of an investment at the time of its sale or exit from a business venture, influenced by market conditions, company performance, and industry trends.
A follow-on investment is additional funding provided to a company after the initial investment round to support continued growth or capitalize on new opportunities.
A General Partner (GP) is an entity or individual responsible for managing a private equity or venture capital fund, tasked with raising capital, selecting investments, managing the portfolio, and generating returns for investors known as Limited Partners (LPs).
Global Macro Strategy is an investment approach that analyzes economic and political trends on a global scale to make investment decisions.
A hedge fund is a pooled investment vehicle that utilizes various strategies, including leverage and derivatives, to achieve active returns for its investors, typically accessible only to accredited individuals due to its higher risk and complexity.
A hurdle rate is the minimum acceptable return on an investment, used by investors to determine whether a project is worth pursuing.
An incubator is a program designed to help startups and early-stage companies develop by providing services such as mentorship, office space, and funding.
An Initial Coin Offering (ICO) is a fundraising method used by startups to raise capital by issuing digital tokens in exchange for cryptocurrency or fiat money.
Later-stage financing is the process of funding a company that has already achieved significant growth and is seeking capital to expand further, optimize operations, or pursue new markets.
A Leveraged Buyout (LBO) is a financial transaction where a company is acquired using a significant amount of borrowed money, typically bonds or loans, to meet the cost of acquisition.
Market Neutral refers to an investment strategy that aims to profit from both rising and falling prices in one or more markets, while minimizing exposure to overall market movements.
Merger arbitrage is an investment strategy that seeks to capitalize on price discrepancies before and after a merger or acquisition is announced.
A performance fee is a payment made to an asset manager for generating positive returns on an investment portfolio, often structured as a percentage of the profits above a set benchmark, aligning the manager's interests with those of the investor.
A pivot is a strategic shift in business direction to test a new approach or optimize performance.
Post-money valuation is the value of a company after external financing or capital injections have been added to its balance sheet, crucial for determining ownership percentages and the dilution impact on existing stakeholders.
Pre-Money Valuation is the estimated value of a company before it receives external investment or financing, crucial for determining the equity stake an investor receives.
Recapitalization is a corporate restructuring strategy aimed at changing a company's capital structure by altering the mix of equity and debt.
Runway refers to the length of time a company can sustain its operations with its current cash reserves before needing additional funding.
Seed capital is the initial funding used to start a business, covering early expenses before the company can generate revenue.
Series A, B, and C funding rounds represent stages of startup financing that enable companies to scale operations, develop products, and expand market reach.
A startup is a young company founded to develop a unique product or service and bring it to market, characterized by innovation and scalability, aiming for rapid growth, often in fast-paced industries like technology.
A target company is a business entity identified as a potential acquisition or merger candidate, aligning with the strategic goals of the acquiring entity by offering value through assets, market position, or synergy potential.
A term sheet is a non-binding agreement outlining the basic terms and conditions under which an investment will be made, serving as a blueprint for final deal agreements by detailing key aspects such as valuation, ownership, and investor rights.
A trade sale is the process of selling a company, or a stake in it, to another company within the same industry.
A unicorn is a privately held startup company valued at over $1 billion, signifying the rarity of such successful ventures and often celebrated for their rapid growth and disruptive potential.
Venture debt is a type of financing provided to early-stage, high-growth companies that have already raised equity from venture capitalists, offering additional capital without diluting ownership and typically used to extend cash runway, invest in growth, or fund specific projects.
A vesting schedule is a timeline that outlines when employees gain full ownership of certain benefits, typically retirement plans or stock options.
