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You find some selected terms. For further information we recommend the glossary
of the German Private Equity and Venture Capital Association e.V. (BVK).
Co-Investment
At least two investors share involvement in an enterprise. They could be investment companies, private investors or industrial partnerships. If there were more than two investors, one of them would become the lead investor. They would take a more active role in the structuring and project management of the engagement, and often coordinate the interaction between the co-investors and the enterprise.
Due Diligence
The process that businesses, or more precisely their lawyers and accountant carry out, when one is about to acquire another. Basically, due diligence involves checking as much as possible about a company's financial performance and its technical and legal liabilities before the deal is done.
Exit
Exit of one of the investors through sale of their market shares. This can happen through the stock market (Going Public), through sale to an industrial or strategic investor (Trade Sale), sale to another financial investor (Secondary Purchase) or through buy back of the shares from the original investor (Buy Back). En exit from the portfolio because of technical or economical insolvency is also called exit.
Funds
Originally a French expression for capital. A fund is a "financial pot" for all capital investors. A fund collects and manages assets for a specific purpose.
ICT Technology
An acronym for Information and Communication Technology
Letter of Intent (LOI)
The term for a written document declaring the intention to finalise contracts for an investment by the business and the possible investor. This letter of intent contains already many of the contract details, such as the level of finance, share purchases and co-management.
Minority Investment
The investment of nominal capital lies below 50%.
Open Investment
In an open investment the investor becomes part of he enterprise that they invested in. They are directly involved in the development of the investment.
Private Equity
This term stands for the investment capital of private investors, mostly in subsequent investment phases. In a wider sense Private Equity is a term to specify pre stock market investment capital. Next to Venture Capital the term also incorporates mezzanine finance and buy outs.
Private Public Partnership
A term for the cooperation of public and private investors.
Silent Partnership
The investor does not receive any shares in the nominal or base capital of the enterprise. In a typical silent partnership the investor is not affected by any losses of the business, in opposition to an atypical silent partnership. For a silent partnership fixed and variable premiums are agreed.
Unique Selling Proposition
A term for an outstanding characteristic of an enterprise. A company with a unique selling proposition for a certain product or a specific technical field possesses a potential advantage above any competition.
Venture Capital
Capital invested into small and start up companies in return for equity ownership. Venture Capital is supplied to companies, maybe start-ups that are high risk and which could not get funds by listing on the stock market or borrowing from banks.
Venture capital is primarily dependent on the growth potential of the business an its resulting turnover. The funding is time limited.
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