Leveraged Buyout (LBO)
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.
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Related Terms
View all termsLater-Stage Financing
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.
Leverage
Leverage is the strategic use of borrowed capital to increase the potential return on investment.
Limited Partner (LP)
A Limited Partner (LP) is an investor in a partnership who provides capital but bears limited liability for the partnership’s debts and obligations, playing a crucial role in investment vehicles like private equity funds, venture capital funds, and hedge funds by contributing capital without participating in management.
Limited Partnership Agreement (LPA)
A Limited Partnership Agreement (LPA) is a legal contract that outlines the terms, conditions, rights, responsibilities, and liabilities of general and limited partners in a limited partnership, crucial for managing investment funds, particularly in private equity and venture capital.
Liquidation Preference
Liquidation preference determines the payout order in the event of a company’s liquidation or sale, specifying who gets paid first and how much they receive when a company is dissolved or acquired.
Lock-Up Period
A lock-up period is a predetermined span of time during which investors are restricted from selling or redeeming shares of a particular investment.
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