PE & VC glossary

A formal position on a company’s board of directors, usually carrying voting rights and duties to oversee management and major decisions.

A record of a company’s ownership, showing shareholders, the securities they hold and their relative ownership percentages.

An investment made alongside a fund or lead investor in the same company or transaction, typically through a separate allocation.

The reduction in an existing shareholder’s ownership percentage when a company issues additional shares or other equity securities.

The review of a company’s business, finances, legal position, technology, market and other material risks before an investment decision.

A transaction through which an investor realises some or all of an investment, such as a sale, merger, public offering or secondary share sale.

Additional capital invested in a portfolio company after the investor’s initial investment.

The year in which an investment fund begins investing or makes its first investment; it is commonly used when comparing funds from similar periods.

The entity or team responsible for managing an investment fund, making investment decisions and overseeing the portfolio.

The structures and processes through which a company is directed and overseen, including board responsibilities, reporting and decision rights.

Equity capital provided to an established company seeking to expand, generally without the investor taking full control of the business.

An investor that commits capital to a private fund while delegating day-to-day investment management to the general partner.

A company in which an investment fund or investment firm currently holds an investment.

An early financing round used to develop a product, validate a market and build the initial team before later institutional rounds.

A company’s first major priced institutional equity financing, generally used to develop a proven product or business model and support growth.

A usually non-binding document outlining the principal commercial and legal terms proposed for an investment.

The agreed or estimated value of a company. In a financing, pre-money valuation is measured before the new capital and post-money valuation after it.