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The section of the US Bankruptcy Code that outlines the process for asset liquidation.Ī fund that is finished taking commitments from limited partners and is ready to make investments.Īn account that helps determine the net debt and working capital that will be used to establish the final price of an M&A deal according to the agreed price formula.Ī document that establishes the final settlement between all parties involved in an M&A deal and results in the transfer of ownership from, and payment to, the target company. The section of the US Bankruptcy Code that outlines the process for asset reorganization. When a company sells all or part of its business.Ĭlauses that can invalidate or dissolve a contract in the event that a change in control of the company takes place. The amount of capital available in a fund for investors to invest.Ī general partner’s share of the capital gains from a fund, usually 20%.
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When a general partner is ready to make an investment, it will ask its limited partners for the capital they’ve already committed to the fund. A leveraged buyout is when firms use a mix of cash and debt to acquire equity, which is very common. Ī private equity transaction in which a firm acquires all-or a significant amount of-equity in a company. While similar to VC funds, many BDCs are publicly traded, which allows smaller, non-accredited investors to back startups. Investments can be made in both public and private entities. How long it takes a company to spend the capital it received from investors.Ī company created to invest in both the debt and equity of small and medium-sized businesses. The main entity responsible for the issuance of new equity, debt and other securities.Ī fee paid by the seller if it breaches or decides to terminate a definitive acquisition agreement.Ī temporary, limited amount of financing that serves as a 'bridge' until a long-term debt or equity investment can be secured.Īn investment in an existing asset, land or structure that typically requires repairs, upgrades and expansion. VC and PE investors will often place executives on the boards of their portfolio companies. When a fund compares its returns to the performance of similar funds.Ī group of individuals selected to represent stockholders with regard to company policies or significant company decisions. When the assets of a company are acquired instead of shares. Pledged assets may include inventory, equipment or accounts receivable that will be redeemed in the event of default by the debtor. To balance risk and reward, asset allocation is determined by investment goals, risk tolerance and time.Īny form of lending to a business that is collateralized or secured by a balance sheet asset. Alternative investments include venture capital, private equity, hedge funds and real estate.Ī high-net-worth individual who makes direct investments into early-stage companies.Ī formal notification of an acquisition to competition regulators. In the US, these regulators include, but are not limited to, the Federal Trade Commission and Department of Justice.
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Bolt-on is used more often in Europe.Īn asset that is not a conventional investment type (stocks, bonds, cash). In add-on deals, the existing portfolio company is called the platform and the private equity firm is called the sponsor. When a private equity firm acquires a company to add onto an existing portfolio company. Most accelerators focus on helping early-stage companies. A program startups can apply to that provides funds and mentorship to help companies grow, usually in exchange for equity.