Key Terms

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

• Accounting Method

• Accounts Payable (“AP”)

• Accounts Receivable (“AR”)

• Acquisition

• Add-Backs

• Amortization

• Annual Percentage Rate (“APR”)

• Annual Percentage Yield (“APY”)

• Asset-Based Valuation

• Asset Purchase Agreement

• Authorized Shares

B

• Balloon Payment

• Bank Confirmation Letter

• Basis Point

• Best Alternative To a Negotiated Agreement (“BATNA”)

• Board of Directors

• Boilerplate

• Business Broker

• Business Valuation

• Buy-Side

• Buyer

• Buyout

C

• Carried Interest (“Carry”)

• Churn Rate

• Compound Annual Growth Rate (“CAGR”)

• Confidential Information Memorandum (“CIM”)

• Customer Acquisition Cost (“CAC”)

D

• Debt Covenant

• Debt Service

• Dilution

• Discount Rate

• Discounted Cash Flow Analysis (“DCF”)

• Drag-Along Rights

• Due Diligence

E

• Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)

• EBITDA Multiple

• Enterprise Value (“EV”)

• Escrow

F

• Family Office

• Fiduciary

• Finder’s Fee

• Free Cash Flow

G

• Goodwill

H

• Holding Company

I

• Indication of Interest (“IOI”)

• Internal Rate of Return (“IRR”)

• Investment Bank

J

K

• Key Employee

L

• Letter of Intent (“LOI”)

• Leverage

• Liquidation Preference

M

• Mezzanine Debt

• Middle Market

• Multiple

N

• Net Working Capital

• No-Shop Clause

O

P

• Payment-In-Kind (“PIK”)

• Private Equity

• Pro Forma

• Pro Rata

• Purchase Agreement

Q

• Quality of Earnings

R

• Recapitalization (“Recap”)

• Recurring Revenue

• Right of First Refusal

S

• Sell-Side

• Seller

• Seller Financing

• Senior Debt

• Stock Purchase Agreement

• Subordinated Debt

T

• Tax Shield

• Turnaround

U

V

• Venture capital

W

X

Y

Z

• Zone Of Possible Agreement (“ZOPA”)