The Ultimate Glossary of Terms for Dealmakers

In addition to traditional financial analysis, SRI company analysis also looks for the companies in selected industries that best meet environmental and social criteria (the best-in-class principle). The person or persons who have ultimate rights to the value of an investment or property, as distinct from the registered owner who may be a nominee. A market where prices decline against a background of widespread pessimism. The net assets of a fund divided by the number of units in circulation. Capital23andMe set to go public via a Virgin Group SPAC merger — The transaction is expected to result in 23andMe having around $984 million in cash available at close. Startup Sub-Sector – A vertical or specific technology specialty. We define Deep Tech-related sub-sectors as Artificial Intelligence , Blockchain, Life Sciences, Advanced Manufacturing & Robotics, Agtech & New Food, and Cleantech. Other tech sub-sectors include Fintech, Cybersecurity, Edtech, Gaming, Adtech, Digital Media. The 2019 Global Startup Ecosystem Report notes the top four startup sub-sectors with the highest growth are Advanced Manufacturing & Robotics (#1), Blockchain (#2), Agtech & New Food (#3), and Artificial Intelligence (#4). Infrastructure – A measure of accelerators and incubators, research grants, and R&D anchors in a startup ecosystem.

Exit methods include a trade sale , flotation on a stock exchange , a share repurchase by the company or its management or a refinancing of the business . A Secondary purchase of the LP interest by another private equity firm is becoming an increasingly common phenomenon. A “financing round” occurs when a company raises capital in a structured manner. This typically means that the company is looking to raise a minimum amount of money at an established valuation (a financing round with a negotiated valuation is called a “priced round”). Financing rounds are typically for common stock or preferred stock, but can also be for convertible notes or SAFEs. Generally speaking, a “closing” is the time in a transaction where the documents are signed and all conditions to the transaction have been fulfilled. When there is a series of closings, the first closing is known as the “initial closing” or “first close” and the final closing is known as the “final closing.”

Swiss Fund Association

Assets under management is the total amount of capital that an asset manager (investment advisor, private equity firm, etc.) has under active management. If a venture capital firm has three $100 million funds, then the venture capital firm has $300 million in AUM. UBTI includes most business operations income and does not include interest, dividends and gains from the sale or exchange of capital assets. Read more about how to mine for litecoin here. Hedge Funds trade their own securities and therefore the tax exempt investor’s share of such income of the hedge fund is not UBTI and not subject to federal income tax. However, hedge funds may subject tax exempt entities to UBTI under certain Circumstances where the hedge fund is borrowing or purchasing securities on margin. Liquidation1) The process of converting securities into cash. 2) The sale of the assets of a company to one or more acquirers in order to pay off debts. In the event that a corporation is liquidated, the claims of secured and unsecured creditors and owners of bonds and preferred stock take precedence over the claims of those who own common stock. Limited Partner ClawbackThis is a common term of the private equity partnership agreement. It is intended to protect the general partner against future claims, should the general partner of the limited partnership become the subject of a lawsuit.

“Strategy shift” occurs when a private equity fund manager strays from the fund’s stated strategy. A stock purchase transaction (also known as a “share purchase transaction”) can refer to two different transactions. The second is a type of acquisition where the outstanding stock of a company is acquired instead of acquiring the company’s assets alone. Another common type of acquisition is an asset purchase transaction, where the assets of a company are acquired. Whether an acquisition is an https://www.beaxy.com/glossary/reverse-indicator/ asset purchase or stock purchase depends on a variety of factors, including liability and tax considerations. “Registration” is the process a company goes through to be able to sell shares of its stock in the public markets. A company will file a registration statement with the U.S. Securities and Exchange Commission (“SEC”) covering shares of its stock, and when the SEC approves the registration, these shares can be sold on a stock exchange such as the New York Stock Exchange or NASDAQ.

things founders need to think about before negotiating a Series A round

For instance, Accel Partners invested in Facebook in 2005 and received enormous returns when it excited through IPO. “Unbanked” is an informal term for adults who do not use banks or banking institutions in any capacity. Unbanked persons generally pay for things in cash or else purchase money orders or prepaid debit cards. Unbanked persons also typically do not have insurance, pensions, or any other type of professional money-related services. They may take advantage of alternative financial services, such as check-cashing and payday lending, if such services are available to them. The first round of small, early-stage investment from family members, friends, banks or an investor is commonly referred to as seed funding. Founders sometimes develop an exit business strategy before or during their entrepreneurial journey. An exit is a way to transition the ownership of your company to another company and pay back your investors.

Startups are usually seeking to solve a problem of fill a need, but there is no hard-and-fast rule for what makes a startup. A company is considered a startup until they stop referring to themselves as a startup. The act of a startup quickly changing direction with its business strategy. For example, an enterprise server startup pivoting to become an enterprise cloud company.

The Flow Chart of Venture Capital

RecallableThe total amount of distributions that may be recalled by the fund at a future date. Re-capitalization FinancingCapital provided for a significant overhaul of a company’s financial structure. Pooled IRRA method of calculating an aggregate IRR by summing cash flows together to create a portfolio cash flow. The IRR is subsequently calculated on this portfolio cash flow. Middle-Market FirmsFirms with growth prospects of more than 20 percent annually and five-year revenue projections between $10 million and $50 million.

If the borrower defaults on the loan , then the lender typically has the right to seize the specific assets securing the loan. Secured debt is senior in priority to unsecured debt in the event of a bankruptcy. A “recapitalizatioi” is a restructuring of a company’s capital structure (the company’s mix of equity and debt). A “pitch” is the presentation made to persuade an investor to invest in the proposal. One type of pitch is the “elevator pitch” which is a very short verbal presentation, that should take no longer than the time one would have with an investor on an elevator ride. There is not a clear definition for “middle market companies.” Some define middle market companies based on revenues or EBITDA, while others define middle market companies based on enterprise value. For example, one might define middle market companies as those having $25 million to under $1 billion in enterprise value. Another might define middle market companies as those with revenues of $25 million to $500 million. Middle market can also be divided into small-cap and upper middle market.

Warrant bonds

Together the subfunds form one single legal entity, meaning that only the umbrella fund needs to be submitted for authorisation. The subfunds are governed by the same fund regulations and prospectus. Once the umbrella fund has been approved, other subfunds can be created. All UBS Investment Funds domiciled in Luxembourg are umbrella constructions. This term comprises strategies which, depending on the situation, invest in a large number of financial instruments, sectors and markets, according to the opportunities available to the managers. Macro hedge funds follow a trading-opportunistic strategy and attempt to identify and exploit global profit opportunities using macro-economic analysis. Due to the variety of strategies used, the correlations to the markets are also different. Measures the performance of a stated index and assumes reinvestment of all dividends and distributions over a period of time.

Such investments typically involve relatively large amounts, but are more liquid and less risky, as the companies can be sold more quickly or floated on the stock exchange. The investment principles characterise and define the fund. The investor receives information about the securities held in the portfolio, the investment currency, the geographic mix of the investments and the risk diversification of the investment fund. “Fund assets” (also called “net fund assets”) is the term used to denote fund assets based on their market values after deduction of liabilities. With real estate funds, mortgage loans and other debts must be deducted, as must the taxes that have to be paid when properties are liquidated. Investment funds which replicate the investment strategies of the providers for the various risk classes. Asset allocation funds invest worldwide in various instruments, depending on the risk category equities or bonds are overweight. Also known as strategy funds, portfolio funds, investment objective funds, asset management funds or mixed funds. It is expected to travel from Portugal to South Africa and is part of the company’s $1 billion Africa investment that includes a $50 million venture capital startup fund.

Macro Monthly Market Updates

In most LBOs, public shareholders receive a premium to the market price of the shares. A substantially debt-weighted financing of an Acquisition. Narrow-based weighted average anti-dilution — a system used in connection with anti-dilution protection. Investor A’s preferred shares are re-priced to a weighted average of investor A’s price and investor B’s price. If a narrow-based weighted average system is used, the denominator of the formula for determining the new weighted average price contains only a total number of outstanding shares .

Mandatory Redemption may be automatic or may require a vote of the series of Preferred Stock having the redemption right. Issue PriceThe price per share deemed to have been paid for a series of Preferred Stock. This number is important because Cumulative Dividends, the Liquidation Preference and Conversion Ratios are all based on Issue Price. The most common example is where a company does a bridge financing and sells debt that is convertible into the next series of Preferred Stock sold by the Company at a discount to the Issue Price. Internal rate of return The discount rate at which the present value of future cash flows of an investment equals to the cost of the investment. It is determined when the net present value of the cash outflows and the cash inflows equal zero, with the discount rate equal to the IRR. Exit MechanismThe strategic means by which a private equity fund liquidates its stake in a business and achieves optimal returns. There are multiple exit routes, including Acquisition, Company Buyback, Initial Public Offering, Secondary Purchase and Write-off. Elevator PitchAn extremely concise presentation of an entrepreneur’s idea, business model, company solution, marketing strategy, and competition delivered to potential investors. Should not last more than a few minutes, or the duration of an elevator ride.

A figure, usually expressed as a percentage, to indicate, for example, how high the issue price of a security lies over a specific reference price, usually the nominal value. A premium can also mean the amount a buyer is willing to pay for a right above the book value. For derivative instruments used for hedging purposes , it is the price that the option buyer pays for the right to sell the underlying security. In the case of the put options used for the Limited Risk Funds, the premium rises as market volatility increases. The buyer of an option acquires the right – but not the obligation – to buy or sell a specified amount of a certain underlying instrument at a predetermined price on or by a specified future date. The buyer pays the seller of the option a premium for this right. Securities privately placed (i.e. without public advertisement) on the Swiss capital market by foreign borrowers. An investment fund which does not charge any commission on the subscription or redemption of units. The fund assets calculated at market values less all liabilities.