How investors and founders realize returns — IPOs, M&A, secondaries, and distribution waterfalls.
24 terms
An acquisition made primarily to hire the target company's team rather than to acquire its product or technology.
A transaction in which one company purchases another, either for its technology, team, customers, revenue, or strategic position — the most common exit path for venture-backed startups.
A large, privately negotiated sale of shares, typically executed off the public exchange to minimize market impact.
A price range that limits the upside and downside of a transaction, commonly used in M&A deals involving stock consideration.
SEC correspondence identifying issues in a company's regulatory filing that must be addressed before approval.
A path to going public in which a company lists existing shares directly on a stock exchange without issuing new shares or using investment bank underwriters — no IPO lockup, no underwriting fee.
A post-acquisition payment structure where the seller receives additional consideration if the acquired company hits agreed performance milestones after closing.
A contingent payment in an acquisition where the seller receives additional compensation if the acquired company meets specified performance targets after closing.
The planned path for investors and founders to realize returns on their investment — typically through IPO, acquisition, or secondary sale.
An acquirer — typically private equity — focused purely on investment returns rather than operational or strategic synergies with the acquired company.
Cash received by founders through selling a portion of their shares before an exit.
A secondary transaction the general partner initiates, offering fund investors a choice between cashing out and rolling into a new vehicle the same manager runs.
Initial Public Offering — the process by which a private company sells shares to the public on a stock exchange for the first time, enabling liquidity for founders, employees, and investors.
Periods when public market conditions are favorable for technology IPOs — characterized by investor appetite, high valuations, and strong aftermarket performance.
Any transaction that allows shareholders — founders, employees, and investors — to convert equity in a private company into cash.
Mergers and Acquisitions — the consolidation of companies through purchase, merger, or other corporate transactions. A primary exit path for VC-backed companies.
A private company going public by merging with an existing public shell company, bypassing the traditional IPO process.
The registration statement a company files with the SEC to go public, containing comprehensive financial and business disclosures.
Special Purpose Acquisition Company — a shell company that raises public market capital via IPO with the sole purpose of merging with a private company to take it public.
The sale of existing shares in a private company by current shareholders (founders, employees, early investors) to new investors, without the company raising new capital.
A company that acquires another business for strategic value like technology, talent, or market access rather than purely financial returns.
An acquisition by a company seeking operational synergy, market access, technology, or talent — as opposed to a financial buyer seeking pure investment returns.
A secondary transaction where a GP sells a portfolio of multiple fund assets together as a package to a secondary buyer, rather than selling individual company positions.
A structured offer to purchase shares from existing shareholders at a specified price, used in private companies to provide liquidity to employees and early investors.