Resources

Private Equity and Entrepreneurship Glossary

Tag-along right

The right of a minority investor to receive the same benefits as a majority investor. Usually applies to a sale of securities by investors. Also known as a
Co-sale right.

Takedown

A schedule of the transfer of capital in phases in order to complete a commitment of funds. Typically, a takedown is used by a general partner of a private equity fund to plan the transfer of capital from the limited partners.

Takeover

The transfer of control of a company.

Ten bagger

An investment that returns 10 times the initial capital.

Tender offer

An offer to public shareholders of a company to purchase their shares.

Term loan

A bank loan for a specific period of time, usually up to ten years in leveraged buyout structures.

Term sheet

A document confirming the intent of an investor to participate in a round of financing for a company. By signing this document, the subject company agrees to begin the legal and due diligence process prior to the closing of the transaction.

Trade secret

Something that is not generally known, is kept in secrecy and gives its owners a competitive business advantage.

Tranche

A portion of a set of securities. Each tranche may have different rights or risk characteristics.

Turn

A single multiple of earnings (typically EBITDA) in a financing structure. For example, if a company had an EBITDA of $20 million, a funder may lend $60 million of senior debt to support a buyout of that company. This would be referred to as 3 turns of senior debt.

Turnaround

A process resulting in a substantial increase in a company’s revenues, profits and reputation.

Two x

An expression referring to 2 times the original amount. For example, a preferred stock may have a “two x” liquidation preference, so in case of liquidation of the company, the preferred stock investor would receive twice his or her original investment.