Jargon BusterCorporate Finance has a splendid collection of slang and jargon. Here are some of the more common terms in current use:
gap funding: funding for deals that fall into the equity gap (£0.25m - £3m); or the last piece of the financial jigsaw that makes up any deal. gearing: the ratio of debt to ordinary share capital - a company with a high proportion of debt is highly geared. Back to the TopBack to the Top IBO (institutional buy out): a buy-out in which the institution - usually a venture capitalist or bank - acquires a majority stake in the target company. information rights: a right to gain information about a company (eg attending board meetings), usually granted to venture capitalists investing in private companies. intellectual property (IP): intangible assets of a company, eg brands, trademarks, copyright or design right. IP rights protect the owner from unauthorised copying - but it may require legal action to do so. internal rate of return: see IRR investment philosophy: the rationale behind a venture capitalist or private equity fund's decision to invest - or not - in a certain type of company. Some may not invest in particular types of company (eg dotcoms) whilst others will be sector specific, eg early-stage technology companies. IPO (initial public offering): American jargon for a flotation, increasingly used in the UK. IRR: internal rate of return set by investors to calculate the cost to the investee company of the equity investment; used as a key criterion of the company's annual performance. Back to the Topleveraged buy-out: a buy-out using a high ratio of debt to equity. listed company: refers to a plc that is listed on a Stock Exchange. Back to the TopJargon reproduced from The Culture of Capital, kind permission of Capsica
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