- Leveraged Buyout
- A buyout is defined as the purchase of a company or a controlling interest of a corporation's shares, product line or business. A leveraged buyout is accomplished with borrowed money or by issuing more stock.9
Stock Options | Redeemable Preferred Stock | Restricted Shares
Buy-Sell Agreement - What? Why? How?
- Ownership in the capital of a Company. In corporations, it is called “stock”; in limited partnerships or LLCs, it is called “interests” or “units.”3
- This designation is given to a stockholder’s ownership in a company. The amount of ownership is obtained when an individual or corporation purchases one or more shares of stock (equity shares). The more equity purchased, the greater the ownership.4
- Based on supply and demand, this term refers to the societal arrangement whereby consumers purchase goods and services from businesses and individual sellers in exchange for currency. In economic relevance, the “market” can be divided into different industries, such as biotechnology, food, etc. The exchange between the consumer and seller contribute to a society’s market economy which greatly depends on these transactions for economic viability.4
- LBO (Leveraged Buyout)
- (LBO) A takeover of a company, using a combination of equity and borrowed funds. Generally, the target company’s assets act as the collateral for the loans taken out by the acquiring group. The acquiring group then repays the loan from the cash flow of the acquired company. For example, a group of investors may borrow funds, using the assets of the company as collateral, in order to take over a company. Or the management of the company may use this vehicle as a means to regain control of the company by converting a company from public to private. In most LBOs, public shareholders receive a premium to the market price of the shares.3
- (LBO) This is a type of aggressive business practice whereby investors or a larger corporation utilizes borrowed funds (junk bonds, traditional bank loans, etc.) or debt to finance its acquisition. The high debt-to-equity ratio enables the investors to “buyout” a smaller company with very little cash. Leveraged buy-outs can be either friendly or hostile, depending on the negotiations made.4
- Any obligation by one person to pay another. May be a primary (direct) obligation as in a Note, or a secondary (contingent) obligation as in a guaranty.3
- This is an amount of money that a borrower owes to an individual, investor, or lending institution. In the finance world, the word “debt” is often associated with interest payments. For example, when an individual has a credit card limit of $5,000, the lender, usually a bank, is willing to lend the credit card holder $5,000 of credit. If the lender uses $500 of that total amount, they are now considered to be in $500 debt until the total amount is paid. Partial payment of an owed amount always encompasses interest.4
- A legal entity structure for businesses enterprises which are typically chartered by a state or the federal government, under which ownership is held by shareholders.6
Non-Dilutive Shares | Supermajority | Tag Along/Drag Along
14 Types of Information Investors May Request as Part of their Due Diligence Checklist for Your Startup
Next Step, Screening Meeting with the Angel Group; Are You Prepared?
Series LLC – yes or no?
- The Property or other assets a borrower uses to secure a loan. If payments are not made, the lender can seize the collateral to recoup its loss. Secured (collateralized) loans are less risky to lenders and they are therefore, more likely to make loan.6
Loan to Value | Equity Seed Round | Discounted Convertible Note
Three Things a Bank Wants to Know Before Giving You A Loan
8 Types of Insurance to Mitigate Startup Risks
- This word refers to all financial resources that a corporation owns. Current assets can be any form of currency, including traded inventory, investments, and checks. Fixed assets (capital assets) consist of material goods and equipment of a company, such as the land by which the company sits on, the company building, and technological machinery. Intangible assets mainly comprise of intellectual property protection, copyrights, patents, etc.4
Net Asset Value | Net Worth | Servicemark
Patents and Trademarks
8 Board Resolutions for Entrepreneurs to Address as They Establish Their Startup
- A process under which a company acquires the controlling interest of another company.6
Buyout | Merger
Founders: Do You Have An Exit Strategy?