Private Equity Glossary: Key Terms and Definitions
- Anti-Dilution Protection
- Broken Deal Costs
- Cash-on-Cash Multiple
- Clawback
- Cliff Vesting
- Commitment Period
- CV (Continuation Vehicle)
- Debtor-in-Possession Financing (DIP)
- General Partner (GP) Commitment
- ICA (Inter-Creditor Agreement)
- KS-PME (Kaplan-Schoar PME)
- Net Operating Profit After Tax (NOPAT)
- Operational Diligence
- Paid-In Capital
- Placement Agent
- Advisory Committee (LPAC)
- Accounting Standards Codification (ASC)
- Asset Stripping
- Bid-Ask Spread (Auction)
- Buyout
- Capital Asset Pricing Model (CAPM)
- Conversion Ratio (Preferred Stock)
- Covenant
- DPI (Distributions to Paid-In)
- DSCR (Debt Service Coverage Ratio)
- Due Diligence
- Escrow
- Full Ratchet
- Hart–Scott–Rodino Antitrust Filing (HSR)
- Hurdle Rate (Preferred Return)
- Leveraged Buyout (LBO)
- Leveraged Recapitalization
- Loan-Life Coverage Ratio (LLCR)
- Pre-Money Valuation
- Accredited Investor
- Adjusted Present Value (APV)
- Cap Table
- Capital Call
- Closing Adjustment
- Discounted Cash Flow (DCF)
- Distressed Debt
- Dividend Recap (Div Recap)
- Drag-Along
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- General Partner (GP)
- Growth Equity
- Investment Period
- Management Buyout (MBO)
- Negotiated Sale
- Operating Partner
- Acceleration Clause
- Annual Recurring Revenue (ARR)
- Bridge Loan
- Customer Acquisition Cost (CAC)
- Cash Sweep
- Catch-Up
- Down Round
- Friends and Family Round
- Fulcrum Security
- Fund of Funds
- Gate
- Information Memorandum (IM)
- Initial Public Offering (IPO)
- Key Person Provision
- Lockup Period
- Customer Lifetime Value (LTV)
- Material Adverse Change or Effect (MAC/MAE)
- Mezzanine Debt
- MoIC (Multiple on Invested Capital)
- Net Asset Value (NAV)
- PIK (Payment in Kind)
- Post-Money Valuation
- Business Development Company (BDC)
- Beta (β)
- Bullet
- Earn-Out
- Equity Kicker
- Exit
- Loan-to-Own
- Net Revenue Retention (NRR)
- Production Tax Credit (PTC)
- Public Market Equivalent (PME)
- Alpha
- Anchor Investor
- Contract Development and Manufacturing Organization (CDMO)
- Co-Investment
- Continuation Vehicle
- Duration
- Earn-In
- Fund Extension
- Holdco
- Portfolio Company (PortCo)
- Preferred Shares
- Private Credit
- Amortisation
- Carried Interest (Carry)
- Contract Research Organization (CRO)
- Dry Powder
- Days Sales Outstanding (DSO)
- Environmental, Social, and Governance (ESG)
- Environmental, Social, and Governance (ESG) Diligence
- Exit Multiple Expansion
- Institutional Limited Partners Association (ILPA)
- Internal Rate of Return (IRR)
- Investment Tax Credit (ITC)
- J-Curve
- Management Fee
- Management Incentive Plan (MIP)
- Net Debt
- Original Issue Discount (OID)
- 100-Day Plan
- Add-On
- Capital Commitment
- CCC (Cash Conversion Cycle)
- Committee on Foreign Investment in the United States (CFIUS)
- Confidential Information Memorandum (CIM)
- Collateralized Loan Obligation (CLO)
- Due Diligence Questionnaire (DDQ)
- Deal Sourcing
- Distribution
- Enterprise Value
- Fixed-Charge Coverage Ratio (FCCR)
- Free Cash Flow to the Firm (FCFF)
- Limited Partner (LP)
- Limited Partnership Agreement (LPA)
- Payment-in-Kind (PIK) Toggle
- Platform Investment
- Private Placement Memorandum (PPM)
- Quality of Earnings (QoE)
- Roll-Up
- Soft Commitment
- Sponsor
- Special Purpose Vehicle (SPV)
- Subscription Credit Line
- Tax Amortization Benefit (TAB)
- Transition Services Agreement (TSA)
- Vendor Due Diligence (VDD)
- Waterfall
- Equalization Interest
- Sustainability-Linked Loan (SLL)
- Unitranche
- Warrant
- YTM (Yield to Maturity)
- Residual Value to Paid-In Capital (RVPI)
- Revolver
- Rollover Equity
- Tag-Along Threshold
- Total Contract Value and Annual Contract Value (TCV/ACV)
- TVPI (Total Value to Paid-In)
- Zombie Fund
- Side Letter
- General Partner (GP)-Led Secondary
- Single-Asset Continuation Vehicle (Single-Asset CV)
- Qualified Small Business Stock (QSBS)
- SaaS
- Strategic Buyer
- Vintage Year
- Weighted Average Cost of Capital (WACC)
- Modified Internal Rate of Return (MIRR)
- General Partner (GP) Catch-Up
- Reverse Termination Fee
- Representations and Warranties Insurance (RWI)
- Secondary Buyout (SBO)
- Weighted Average Ratchet
- Sandbag Provision
- Terminal Value
- Value Creation Plan (VCP)
- No-Fault Divorce
- Most-Favored-Nation (MFN)
- Fee Offset (Transaction & Monitoring Fees)
- Recapitalization (Recap)
- Secondary
- Secured Overnight Financing Rate (SOFR)
- Step-Up
- Direct Alpha
- Capital Recycling
- Put-Call Option
- Secondary Sale (LP)
- Sustainable Finance Disclosure Regulation (SFDR)
- Staple Financing
- Tag-Along
- Top-Tier Fund Access
- Working Capital
- Deal-by-Deal Waterfall (American Waterfall)
- Valuation, Diligence, & Value Creation
- Accounting & LBO Flow Through
- Paper LBOs & Returns Math
- Private Equity Fundamentals
- Advanced LBO Modeling Mechanics & Deal Structuring
- Mandatory Amortization
- Cash Interest