Glossary of terms
At PE Cube, we aim at offering more than a Private Equity software to our customers: we want to support you in every aspect of your daily activities.
In that sense, we share with you a Glossary on Private Equity terms.
You will find below all the relevant terms of the Private Equity industry, with their definitions, as provided by trusted sources (sources: Gips®, European Parliament, ESMA, ILPA, Invest Europe, Investopedia, and IPEV).
Terms by letter
PE CUBE Terms
There are currently 16 names in this directory beginning with the letter V.
V
Valuation
Method of ascribing value to a company. In private equity, methods used include discounted cash flow, comparables and adjusted present value.
Source: ILPA
Source: ILPA
Valuation Policy
The method or guidelines used by a private equity fund to determine the value of its portfolio assets.
Source: ILPA
Source: ILPA
Valuation Technique
A Valuation Technique is a generally accepted methodology used to determine the Fair Value of an equity or Debt Investment in an Investee Company. Valuation Techniques include the Income Approach, the Market Approach, and the Replacement Cost Approach. Each of these Valuation Techniques involves methodologies including, but not limited to, pricing multiples of comparable public companies, discounted cash flow analysis, and net assets.
Source: IPEV
Source: IPEV
Valuator
A valuator is the entity responsible for the process of estimating the potential market value of a financial asset or liability. In the case of AIF, valuations would be carried out on the assets, for example, the investments in marketable securities such as stocks and options. Valuations are required in many contexts including investment analysis, capital budgeting, merger and acquisition transactions, and for financial reporting.
Source: europarl
Source: europarl
Valuer
The Valuer is the person with direct responsibility for valuing one or more of the Investments of the Fund or Fund-of-Funds.
Source: IPEV
Source: IPEV
Venture Capital
ILPA: A specialized form of private equity, characterized chiefly by high-risk investment in new or young companies following a growth path (see: Stages of Development) in technology and other value-added sectors.
Invest EUROPE: Funding typically provided in equity form to companies in the early stages of their life cycles, i.e. seed, early-stage, development, or expansion.
Source: ILPA, Invest EUROPE
Invest EUROPE: Funding typically provided in equity form to companies in the early stages of their life cycles, i.e. seed, early-stage, development, or expansion.
Source: ILPA, Invest EUROPE
Venture Capital Fund / Financing
IPEV: A Private Capital Fund that invests in start-up and small- to medium-sized enterprises with strong growth potential. These Investments are generally characterised as high-risk/high-return opportunities.
Invest EUROPE: Venture capital funds focused on both early and later stage investments.
ILPA: An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.
Source: IPEV, Invest EUROPE, ILPA
Invest EUROPE: Venture capital funds focused on both early and later stage investments.
ILPA: An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.
Source: IPEV, Invest EUROPE, ILPA
Venture Capitalist
A financial institution specializing in the provision of equity and other forms of long-term capital to enterprises, usually to firms with a limited track record but with the expectation of substantial growth. The venture capitalist may provide both funding and varying degrees of managerial and technical expertise.
Source: ILPA
Source: ILPA
Verification
A process by which an independent verifier conducts testing of a firm on a firm-wide basis, in accordance with the required verification procedures of the GIPS standards.
Source: GIPS
Source: GIPS
Vesting Schedules
Timetables for stock grants and options mandating that entrepreneurs earn (vest) their equity stakes over a number of years, rather than upon conversion of the stock options. This guarantees to investors and the market that the entrepreneurs will stick around, rather than converting and cashing in their shares.
Source: ILPA
Source: ILPA
Vintage Year
ILPA: The year of fund formation and/or its first takedown of capital. By placing a fund into an particular vintage year, the Limited Partner can compare the performance of a given fund with all other similar types of funds form in that particular year.
GIPS: Two methods used to determine vintage year are:
1. The year of the investment vehicle’s first drawdown or capital call from its investors.
2. The year when the first committed capital from outside investors is closed and legally binding.
Source: ILPA, GIPS
GIPS: Two methods used to determine vintage year are:
1. The year of the investment vehicle’s first drawdown or capital call from its investors.
2. The year when the first committed capital from outside investors is closed and legally binding.
Source: ILPA, GIPS
Vintage Year Returns
Vintage year returns show (in respect of any one vintage year) the compound return of all constituent funds formed during the vintage year, from the vintage year to the date specified.
Source: ILPA
Source: ILPA
Voluntary Redemption
The right of a company to repurchase some or all of an investors' outstanding shares at a stated price at a given time in the future. The purchase price is usually the Issue Price, increased by Cumulative Dividends.
Source: ILPA
Source: ILPA
Voting Right
The common stockholders' right to vote their stock in the affairs of the company. Preferred stock usually has the right to vote when preferred dividends are in default for a specified amount of time. The right to vote may be delegated by the stockholder to another person.
Source: ILPA
Source: ILPA
