If a specified number of key named executives cease to devote a specified amount of time to the Partnership, which may include time spent on other funds managed by the manager, during the commitment period, the “key man” clause provides that the manager of the fund is prohibited from making any further new investments (either [...]

Professional management attracted by the founder to run the company. Key employees are typically retained with warrants and ownership of the company.

The curve realized by plotting the returns generated by a private equity fund against time (from inception to termination). The common practice of paying the management fee and start-up costs out of the first draw-down does not produce an equivalent book value. As a result, a private equity fund will initially show a negative return.  [...]

Refers to the organization issuing or proposing to issue a security.

The amount of common shares that a corporation has sold (issued).

The price per share deemed to have been paid for a series of Preferred Stock. This number is important because Cumulative Dividends, the Liquidation Preference and Conversion Ratios are all based on Issue Price. In some cases, it is not the actual price paid. The most common example is where a company does a bridge [...]

Incentive Stock Option. Plan which qualifying options are free of tax at the date of grant and the date of exercise. Profits on shares sold after being held at least 2 years from the date of grant or 1 year from the date of exercise are subject to favorable capital gains tax rate.

Internal Rate of Return. A typical measure of how VC Funds measure performance. IRR is a technically a discount rate: the rate at which the present value of a series of investments is equal to the present value of the returns on those investments.

The reinvestment of assets received as a lump-sum distribution from a qualified tax-deferred retirement plan. Reinvestment may be the entire lump sum or a portion thereof. If reinvestment is done within 60 days, there are no tax consequences.

The key players in the private equity industry, based on particular fund structures and sources of capital supply. In the United States, private equity is dominated by Private-Independent Funds, while Canadian activity is diversified across several major groups.
Corporate funds (C): Subsidiaries of financial or industrial corporations.
Government funds (G): Agencies or crown corporations owned by government.
Institutional [...]