A dictionary of terms to help you understand the language used by investors and founders.
Alternative Investment
Amortization
Angel Investor
Assets Under Management (AUM)
Arbitrage
Alpha
Accredited Investor
Acquisition
Anti-Dilution Provision
Accrued Interest
Absolute Return
Beta
Bridge Loan
Buyout
Benchmark
Corporate Venture Capital
Capital Gain
Common Stock
Convertible Note
Carried Interest
Credit Risk
Commodities
Cash Flow
Capital Under Management
Collateral
Clawback Provision
Capital Call
Co-investment
Compound Annual Growth Rate (CAGR)
Carve-out
Capital Stack
Due Diligence
Debt Financing
Dilution
Default
Dividend
Down Round
Direct Investment
Dry Powder
Debenture
Deal Sourcing
Deal Flow
Distressed Assets
Debt Service Coverage Ratio (DSCR)
Discounted Cash Flow (DCF)
Due Diligence Fee
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
Exit Strategy
Equity Financing
Equity
Early-stage Investment
Equity Multiple
Escrow Account
Evergreen Fund
Exits
Equity Kicker
Exit Multiple
Equity Carve-Out
Financial Instrument
Funding Round
First-Loss Position
Fund of Funds (FOF)
Fixed Income
Fixed Charge Coverage Ratio
Financial Covenant
Financial Sponsor
Fund Lifecycle
General Partner (GP)
Green Shoe Option
Growth Capital
Hedge Fund
Holding Period
Hurdle Rate
Interest Rate
Initial Public Offering (IPO)
Investment Bank
Internal Rate of Return (IRR)
In-kind Distribution
Liquidity Event
Liquidity
Leveraged Recapitalization
Leveraged Buyout (LBO)
Limited Partner (LP)
Limited Liability Company (LLC)
Lead Investor
Lock-up Agreement
Market Capitalization
Mortgage
Market Volatility
Mutual Fund
Mezzanine Financing
Management Fee
Minimum Viable Product (MVP)
Mezzanine Level
Net Worth
Non-Performing Asset
Non-Disclosure Agreement (NDA)
Net Asset Value (NAV)
Non-recourse Financing
Option
Operational Due Diligence
Overhang
Portfolio Diversification
Portfolio Company
Profit
Private Equity
Post-Money Valuation
Pre-Money Valuation
Pro-rata Rights
Par Value
Preferred Stock
Private Placement
Preferred Return
Preferred Dividend
Participation Fee
Quasi-equity
Real Estate
Rounds of Financing
Reinvestment Risk
Risk Capital
Return on Investment (ROI)
Redemption Rights
Risk Adjusted Return
Revolving Credit Facility
Strategic Acquisition
Sponsor
Stakeholder
Speculation
Seed Money
Stock
Secondary Financing
Subscription Agreement
Spin-off
Secondary Offering
Sweat Capital
Super Angel
Silent Partner
Shareholder
Short Selling
Secondary Market
Syndicate
Stock Option
Sovereign Wealth Fund
Special Purpose Acquisition Company (SPAC)
Senior Debt
Strategic Investor
Soft Cap
Series Funding
Staging
Stagflation
Sunk Cost
Startup Ecosystem
Synergies
Subordinated Debt
Sweat Equity
Term Sheet
Takeover
Tranche
Third Party Acquisition
Turnaround
Term Loan
Tax Shield
Top Line Growth
Track Record
Trade Sale
Time Value of Money
Underwriter
Unicorn
Unlevered Free Cash Flow
Value-Added Investor
Vintage
Vulture Fund
Vesting
Venture Capital
Volatility
Venture Partner
Vertical Integration
Venture Debt
Vintage Year
Variable Interest Entity (VIE)
Waterfall Structure
Warrant
Working Capital
Working Interest
Washout Round
Write-off
Write-down
Yield Curve
Yield
Zombie Company
Zombie Fund
Zero-coupon Bond