-
VC/PE
术语
（
work in
process
）
一般性术语
Private
securities
—
securities that
are not registered with the Securities and
Exchange Co
mmission and do not trade on
any exchanges. The price per share is negotiated
between the bu
yer and the seller (the
Private equity
—
equity investments in
nonpublic companies.
Alternative asset
class
—
a class
of investments that includes private equity, real
estat
e, and oil and gas, but excludes
publicly traded securities. Pension plans, college
endowmen
ts, and other relatively large
institutional investors typically allocate a
certain percenta
ge of their investments
to alternative assets with an objective to
diversify their portfolio
s.
Private placement memorandum
(PPM)
—
a
document explaining the details of an investment
t
o potential investors. For example, a
private equity fund will issue a PPM when it is
raisin
g capital from institutional
investors. Also, a startup may issue a PPM when it
needs growt
h capital. Also known as
Venture capital
—
a segment of the private
equity industry which focuses on investing in
ne
w companies with high growth rates.
VC
作价相关术语
Post-money valuation
—
the valuation of a company
including the capital provided by the
cur
rent round of financing. For
example, a venture capitalist may invest $$5
million in a compan
y valued at $$2
million
p will have a post-money
valuation of $$7 million.
Pre-money
valuation
—
the
valuation of a company prior to the current round
of financing. F
or example, a venture
capitalist may invest $$5 million in a company
valued at $$2 million pre
-money. As a
result, the startup will have a
Comparable
—
a
publicly traded company with similar
characteristics to a private company
th
at is being valued. For example, a
telecommunications equipment manufacturer whose
market va
lue is 2 times revenues can be
used to estimate the value of a similar and
relatively new co
mpany with a new
product in the same industry.
Price
earnings ratio (PE ratio)
—
the ratio of a public
company's price per share and its n
et
income after taxes on a per share basis.
Liquidity discount
—
a decrease in the value of
a private company compared to the value
o
f a similar but publicly traded
company. Since an investor in a private company
cannot readi
ly sell his or her
investment, the shares in the private company must
be valued less tha
n a comparable public
company.
Capital Asset Pricing Model
(CAPM)
—
a method of
estimating the cost of equity capital
o
f a company. The cost of equity
capital is equal to the return of a risk-free
investment plu
s a premium that reflects
the risk of the company''''''''s equity.
Beta
—
a measure
of volatility of a public stock relative to an
index or a composite of al
l stocks in a
market or geographical region. A beta of more than
one indicates the stock ha
s higher
volatility than the index (or composite) and a
beta of one indicates volatility
equ
ivalent to the index (or composite).
For example, the price of a stock with a beta of
1.5 wi
ll change by 1.5% if the index
value changes by 1%. Typically, the S&P500 index
is used in c
alculating the beta of a
stock.
Internal rate of return
(IRR)
—
the
interest rate at which a certain amount of capital
toda
y would have to be invested in
order to grow to a specific value at a specific
time in the f
uture.
Venture
capital method
—
a valuation method whereby an estimate of the
future value of a co
mpany is discounted
by a certain interest rate and adjusted for future
anticipated dilutio
n in order to
determine the current value. Usually, discount
rates for the venture capital m
ethod
are considerably higher than public stock return
rates, representing the fact that
ven
ture capitalists must achieve
significant returns on investment in order to
compensate for t
he risks they take in
funding unproven companies.
投资结构及
Term
Sheet
中涉及的相关术语
Term sheet
—
a document confirming the
intent of an investor to participate in a round of
f
inancing for a company. By signing
this document, the subject company agrees to begin
the le
gal and due diligence process
prior to the closing of the transaction. Also
known as
r of Intent
Common
stock
—
a type of
security representing ownership rights in a
company. Usually, comp
any founders,
management and employees own common stock while
investors own preferred stoc
k. In the
event of a liquidation of the company, the claims
of secured and unsecured credito
rs,
bondholders and preferred stockholders take
precedence over common stockholders.
Stock option
—
a right to purchase or
sell a share of stock at a specific price within a
sp
ecific period of time. Stock purchase
options are commonly used as long term incentive
compe
nsation for employees and
management of fast growth companies.
Preferred Stocks
—
a type of stock that has
certain rights that common stock does not
hav
e. These special rights may include
dividends, participation, liquidity preference,
anti-dil
ution protection and veto
provisions, among others. Private equity investors
usually purchas
e preferred stock when
they make investments in companies.
Convertible preferred stock
—
a type of stock that gives
an owner the right to convert to c
ommon
shares of stock. Usually, preferred stock has
certain rights that common stock doesn
t
have, such as decision-making management control,
a promised return on investment
(dividen
d), or senior priority in
receiving proceeds from a sale or liquidation of
the company. Typi
cally, convertible
preferred stock automatically converts to common
stock if the company mak
es an initial
public offering (IPO). Convertible preferred is
the most common tool for priva
te equity
funds to invest in companies.
Participating preferred
stock
—
a unit of
ownership composed of preferred stock and
commo
n stock. The preferred stock
entitles the owner to receive a predetermined sum
of cash (usua
lly the original
investment plus accrued dividends) if the company
is sold or has an IPO. Th
e common stock
represents additional continued ownership in the
company. Participating prefe
rred stock
has been characterized as
Redemption
rights
—
the
right of an investor to force the startup company
to buy back the s
hares issued as a
result of the investment. In effect, the investor
has the right to take ba
ck his/her
investment and may even negotiate a right to
receive an additional sum in exces
s of
the original investment.
Registration
rights
—
the
rights of an investor in a startup regarding the
registration o
f a portion of the
startup
olders the right to have their
shares included in a registration. Demand rights
give the sha
reholders the option to
force management to register the
company
ing. Often times registration
rights are hotly negotiated among venture
capitalists in multi
ple rounds of
financing.
Pay to play
—
a clause in a financing
agreement whereby any investor that does not
particip
ate in a future round agrees to
suffer significant dilution compared to other
investors. Th
e most onerous version of
ssence ends any preferential rights of
an investor, such as the right to influence key
manag
ement decisions.
Piggyback rights
—
rights of an investor to
have his or her shares included in a
registrati
on of a
startup
Demand rights
—
a type of registration
right. Demand rights give an investor the right to
f
orce a startup to register its shares
with the SEC and prepare for a public sale of
stock (I
PO).