Glossary

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Carried interest

The substantial share, often around 20%, of profits that are allocated to the general partners of a venture capital partnership.

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Co-investment

See syndication.

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Committed capital

Pledges of capital to a venture capital fund. This capital is drawn down over the life of the fund.

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Common stock

The equity typically held by management and founders. Typically, at the time of an initial public offering, all equity is converted into common stock

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Consolidation

A private equity investment strategy that involves merging several small firms together and exploiting economies of scale or scope.

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Convertible equity or debt

A security that can be converted under certain conditions into another security (often into ordinary shares). The convertible shares often have special rights that the ordinary shares do not have.

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Corporate venture capital

An initiative by a corporation to invest either in young firms outside the corporation or units formerly part of the corporation. These are often organised as corporate subsidiaries, not as limited partnerships.