Glossary
Private markets terms, defined.
Short definitions of the terms used in diligence, valuation and fund reporting, each with a note on where it comes up in Hebrides.
C
- Capitalisation table (cap table)The record of who owns a company’s shares, options and convertible instruments, and on what terms.
- Co-investmentAn investment made directly into a company alongside a lead fund, usually on the same terms.
- Comparable company analysis (comps)Valuing a company by applying the multiples of similar companies to its own figures.
D
- Data roomThe secure repository where a company shares the documents investors or acquirers need for due diligence.
- Deal screeningThe first pass over incoming opportunities, deciding which deserve full diligence.
- Discounted cash flow (DCF)Valuing a company as the present value of the cash it is forecast to generate.
- Down roundA funding round priced below the post-money valuation of the company’s previous round.
- Due diligenceThe investigation an investor or acquirer carries out before committing capital.
I
- Information memorandum (IM)The detailed document a seller’s adviser prepares to describe a business to prospective buyers or investors.
- Investment committee (IC) memoThe document that sets out an investment case for approval by a firm’s investment committee.
- Investment thesisA firm’s view of where returns will come from, and the criteria an investment must meet.
L
P
- Portfolio monitoringTracking the performance of companies a fund has already invested in.
- Pre-money and post-money valuationA company’s value immediately before and immediately after new investment in a funding round.
- Precedent transactionsValuing a company by the multiples paid in past acquisitions of similar businesses.
- Private company discountA reduction applied to a private company’s value, against listed peers, for the lack of a liquid market in its shares.
R
T
V
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