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Stage knowledge Flashcards

retain and understand information (72 cards)

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1
Q

Welke soorten bedrijfsovernames zijn er ?

A
  1. Aandelenfusie
  2. openbaar bod
  3. bedrijfsfusie
  4. contractuele fusie
  5. juridische fusie
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2
Q

wat is een NDA ?

A

Non-disclosure agreement : voorwaarden voor de informatieverstrekking over de doelvennootschap in de Due-dilligence fase en reguleert de vertrouwelijkheid van de onderhandelingen en de transactie zelf

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3
Q

wat is turboliquidatie ?

A

het afwikkelen van een rechtspersoon zonder baten en lasten

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4
Q

kentering

A

omslag, omkeer , ombuiging

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5
Q

Pre seed round

A

friends and family round to turn an idea into a viable business

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6
Q

seed funding

A

first official equity funding into starting companies to provide funds for their first steps (market research & product development)

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7
Q

Series A funding

A

VC firms funding round where typically 2-15 million gets raised for companies with great ideas and strong strategies. Investors recieve preferred stock and less than 10% of seed funded companies make it to this stage

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8
Q

Series B funding

A

meant to take a business to the next level, to expand market reach and to grow the company to meet higher levels of demand. 35-51 million.

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9
Q

Series C funding

A

most commonly the last external equity funding.

  • utilized to boost valuation in anticipation of an IPO
  • meant for additional funding to:
  • develop products,
  • expand into new markets or
  • acquire other companies.

goal is to recieve more than double the invested money back

hedge funds, investment banks and PE-funds join the VC investors because the company is established and there is heightend potential for profit.

100’s of millions recieved.

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10
Q

syndication

A

group of investors that pool capital in SPV’s to invest in startups on a deal by deal basis. allowes investors to take on deals with less captial that they wouldnt be able to do individually. good way to diversify portfolio

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11
Q

Special purpose vehicle (SPV)

A

Subsidiary created by parent company to isolate financial risk. have been used for fraud/accounting scandals in the past

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12
Q

unit economics

A

the direct revenues and costs of a particular business measured on a per-unit basis, where a unit can be any quantifiable item that brings value to the business

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13
Q

founder vesting

A

A vesting clause ensures that the founders stay committed to the business for a certain period after the investment.

During this vesting period, the founders “earn” or vest their shares. If they leave before the end of the vesting period, they typically lose (part of) their shares. In early-stage investments, this is typically 4 or 5 years.

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14
Q

Participating Preferred stock

A

type of preferred stock that gives the holder the right to receive dividends equal to the customarily specified rate that preferred dividends are paid to preferred shareholders, as well as an additional dividend based on some predetermined condition. Participating preferred stock can also have liquidation preferences upon a liquidation event.

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15
Q

Tag along rights

A

These rights allow a minority shareholder to sell their share if a majority shareholder is negotiating a sale for their stake

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16
Q

drag along rights

A

empower majority shareholders to force—or “drag”—minority shareholders into a sale, potentially against their wishes.

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17
Q

exit waterfall analysis

A

tool used by companies and their investors to model how the proceeds of an exit would be distributed among shareholders based on the terms of a company’s operating agreement

This liquidation event payout structure is called an exit waterfall because of how distributions spill over from one class of shareholder to the next, moving their way down the cap table.

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18
Q

Milestone funding

A

funding arrangement where funds are released to the startup as it achieves specific, pre-agreed milestones.

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19
Q

Swamping rights

A

This refers to provisions usually contained in a company’s articles of association which allow the private equity or venture capital fund investor enhanced voting rights in certain specified default situations, eg the material failure by a company to reach its budget targets or a material breach of its financing documents and/or subscription and shareholders agreement/investment agreement.

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20
Q

anti-dilution provision

A

a clause in an investment agreement designed to safeguard investors from the dilution of their ownership percentage when new shares are issued at a price lower than what they initially paid

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21
Q

DSCR

A

analytics method to determine if a company can adequately manage its borrowing costs -> net operating income : total debt

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22
Q

distressed asset

A

the cause may be less obvious and the potential repercussions much more challenging—or impossible—to identify and quantify.

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23
Q

pre money valuation

A

Valuation of the business before investment
low valuation means larger dilution of equity by investor

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24
Q

liquidation preferences

A

determines the order in which proceeds are payed out in case of a liquidity event (see exit waterfall)

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25
forms of investement particpation
non-participating participating preferred "double dip" participation cap
26
Conditions precedent
conditions that have to be fulfilled before a deal is complete
27
Sinking fund
Specific fund set up for large future obligations (large expenses or loan repayments)
28
Loan to value
loaned amount as a percentage of the value of the purchased asset
29
Gearing
degree to which a companies operations are funded by lenders vs shareholders -> debt to equity ratio
30
downside protection
techniques to mitigate or prevent a decrease in the value of an investment
31
CAPEX
capital expenditures-> a companies spending on physical assets cannot be deducted from income for tax purposes
32
Business interruption insurance
insurance against monetary losses during periods of suspended operations when a covered event causes physical damage
33
L-TIP
(Long term investment plan) Company policy that rewards employees for reaching specific goals that lead to increased shareholder value - 401 K - Vesting - Stock options
34
Put
insurance on a stock. insures against lower stock price than the strike-> agreed upon price form of downside protection
35
institutional buy out
institutional investors take an controlling interest in the business
36
leveraged buy out
newco incurs debt banked against its assets to buy out. realizes greater return on equity. interest can be deducted (partially)
37
Management buy out
Most typical type of PE-transaction: - existing management team buys all or part of the business alongside a PE-house
38
management buy in
external managers take over the company with financing from PE-investors
39
Payement in kind
instrument that pays interest or dividends to investors of bonds, notes or preffered stock with additional securities or equity instead of cash
40
secondary buy out
PE-investor sells control of portfolio company to secondary Private equity fund
41
sweet equity
options performance rights rights to further shares MIP-> meant to further increase the value of managament equity relative to other shareholders
42
Closing accounts
the determination of the purchase price based on the financial statements of the target prepared as of the day of share transfer
43
General Partner
one of two or more investors who jointly own a business that is structured as a partnership, and who assumes a day-to-day role in managing it.
44
Limited Partner
A partnership made up of two or more partners in which limited partner does not partake in managing the business limited liability but also limited share of the profits
45
carried interest
The performance or incentive fee that is paid to the General partners in an PEF. share of profits earned by general partners of private equity paid out after the fund achieves a minimum return -> hurdle rate
46
hurdle rate
the lowest rate of return a project or investment must achieve before a manager or investor deems it acceptable. It's important when companies or investors make important decisions like pursuing a specific project. Riskier projects generally have higher hurdle rates than those with less risk.
47
op welke 3 manieren houden PE-Funds de bestuurders onder controle ?
1. Door bestuurdersbeloningen afhankelijk te maken van prestatie richting de aandeelhouders 2.Bestuurders mee te laten profiteren van overnames 3. Door een eigen bestuur aan te stellen
48
Capital calls
Een PE-fund weet niet direct exact waar het in zal investeren maar wanneer een target is geselecteerd wordt er door middel van een captial call (of draw down) kapitaal opgevraagd bij de investeerders
49
Buy and Build strategy
involve an initial investment in a business deemed to have significant potential as a ‘platform’ operation that can serve as the foundation upon which other businesses in the same industry can be added to create a larger enterprise. The newly created business, ultimately a product of multiple acquisitions, is then expected to reap the benefits of scale and value accorded its more dominant position in its industry.
50
Capital structure
refers to the way a company finances its overall operations and growth through the use of different sources of funds. In the simplest terms, it is the mix of debt and equity a company uses to fund its business activities. The goal of a well-designed capital structure is to strike the optimal balance between debt and equity that minimises the cost of financing while maximising the company's value.
51
Anchor investor
central investor that makes large capital commitment in an early stage of the funds fundraising so as to ensure the fund reaches first close
52
The Catch up
Name for the stage of the distribution waterfall reached after the investors'Hurdle has been exceeded, when the fund manager receives subsequent distributions (thus “catching up” after previous stages in which all distributions were paid to the investors) until the agreed carried interest profit distribution (typically 80% to investors and 20% to the fund manager) has been reached.
53
Continuation fund
PE-vehicle designed to extend the holding period of one or more assets from an existing fund that hasa reached or is approaching the end of its lifecycle
54
Debt Fund
funds that invest exclusively or predominantly in debt securities
55
Distressed debt
Loans and borrowings relating to debtors experiencing financial or operational default or bankruptcy
56
Distributed to Paid in Capital (The realisation multiple)
gives a potential private equity investor insight into how much of the fund's return has actually been "realised", or paid out, to investors.
57
Distribution Waterfall
the provisions of a fund agreement governing the sequence of payements to investors and the fund manager
58
Divestment period
the stage following the investment period during which a fund disposes of its investments. Typically 4-6 Years
59
Dividend recapitalization
a financial strategy where a company takes on new debt to pay a special dividend to its shareholders. This process effectively replaces equity with debt in the company's capital structure.
60
Types of due dilligence
1. financial 2. legal 3. operational 4. market
61
ELTIFs
European Long-Term Investment Funds: investment vehicle that makes long term investments into private unlisted assets . Low minimums designed to be accesible to all investors
62
equalization payements
Payments to the Fund made by investors who are admitted to the Fund after the Fund has already admitted investors and called-down capital from those other investors. The equalization payments are used to “equalize” the percentage of called-down capital commitment of each investor. This is done by distributing amounts to the “old investors” so that “old investors” and “new investor” have paid into the fund the same percentage of their Capital Commitment. Equalization Payments often require the “new investor” to pay compensatory interest to the fund to compensate the “old investors” for pre-financing the fund’s activities.
63
Fund of funds
investment vehicle that holds shares in other funds rather than in individual securities or private assets
64
Hard Cap
a legally binding upper limit contained in a fund agreement beyond which no further capital commitments to the fund can be accepted from investors
65
Internal Rate of return
the annualized return you’re getting from the cash flows of an investment — adjusted for when you receive them.
66
Discount rate
the interest rate you use to figure out how much future cash flows are worth today reflects the time value of money, risk and opportunity cost
67
Investment Alpha
Represents the degree to which an investment manager or fund can outperform a market benchmark or expected return
68
Asset stripping
selling the target's assets after the acquisition
69
super dividends
extremely high dividends after an acquisition
70
Divestiture
the partial or full disposal of a company or other entity's operations or assets through sale, exchange, closure, or bankruptcy
71
Sharia
"the way" outlines how Muslims should conduct themselves in various aspects of their lives, including their personal lives, their responsibilities to society, their religious beliefs, as well as their finances
72

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