Introduction to Deal Flow.

When a business is looking for private equity or venture capital investment, the first step is to generate a deal flow. Deal flow refers to a stream of potential investment opportunities that a business can choose from. The process of generating deal flow begins with identifying businesses that fit the investment criteria of the private … Read more

What Does a Stock Promoter Do?

A stock promoter is an individual or firm that is paid to promote the sale of a security, typically a new issue of stock. Stock promoters are typically hired by investment banks or issuers of the security. A stock promoter’s job is to generate interest in the security and get people to buy it. This … Read more

What Is Dilution Protection?

Dilution protection is a measure taken by a company to protect its shareholders from having their ownership stake diluted by the issuance of new shares. This can be done by issuing new shares only to existing shareholders, or by giving existing shareholders the right to buy new shares before they are issued to the public. … Read more

Venture Capitalist (VC) Definition.

A venture capitalist (VC) is an individual or firm that provides capital for businesses, usually in the form of equity financing. VCs are typically high-net-worth individuals or firms that invest in early-stage or high-growth companies. VCs typically take an active role in the companies they invest in, and often provide mentorship and advice to the … Read more

Committed Capital.

Committed capital refers to the funds that a private equity or venture capital firm has pledged to invest in a portfolio company. This capital is typically invested over the life of a fund, which is typically 10 years. The committed capital is typically used to finance the acquisition of a portfolio company, and may also … Read more

Secondary Buyout (SBO).

A secondary buyout occurs when a private equity firm sells its portfolio company to another private equity firm. In essence, the original private equity firm is cashing out of its investment, while the second private equity firm is making a new investment. The motivations for a secondary buyout can vary. For the original private equity … Read more

Private Investment Fund Definition.

A private investment fund is a fund that is not available for public investment. Private investment funds are generally only available to accredited investors, which are investors that meet certain criteria set by the Securities and Exchange Commission (SEC). Private investment funds are typically used to invest in private companies, real estate, or other illiquid … Read more

Tag-Along Rights.

Tag-along rights are a contractual right that allows minority shareholders to participate proportionately in an offer to sell the shares of the company. This right gives minority shareholders the ability to sell their shares at the same price and on the same terms as the majority shareholders. This ensures that minority shareholders are not left … Read more

Angel Investor Definition and How It Works.

An angel investor is an individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small percentage of angel investors are also venture capitalists. Angel investors typically invest their own personal funds, as opposed to funds from an institution. They may also invest through a group or … Read more