A business owner who is actively involved in the management and operations of the business.

A company that does not pay income taxes directly, but rather pays taxes through the owners of the company on an individual basis in an effort to avoid double taxation.

Taxes that are paid on the personal property of a business other than inventory, such as the hard assets used in the operations of the business, including machinery, computers, equipment,...

A large company (i.e., platform company), that is used as the foundation to acquire and add onto smaller companies (also known as add-on or bolt-on acquisitions) by a private equity...

A company that raises money from institutional investors and then invests these funds into private companies.

A reorganization of a company’s capital structure, including the debt and equity, whereby a private equity firm purchases less than 100% of a company, leaving the seller with a remaining...

A document signed by a purchaser of a business with a written promise to pay the balance of the purchase over an extended period of time.

A contract used to transfer the ownership or sale of a business.

The final price for a business that is paid at closing.

Revenue that is predictable, stable, and often subscription-based, and can be counted on in the future with a high degree of certainty.

Customers who are not contractually committed to a business, but who still frequent it.

Statements and guarantees by a seller of a business relating to the assets, liabilities, and contacts of the business sold.

The return on an investment calculated as a percentage of the original investment.

A contractual obligation by the owner of an asset to negotiate the sale of an asset with the rights holder before offering the asset for sale to third parties.

A contractual stipulation in which a party has the right to match an offer from a third party.

The purchase or consolidation of smaller companies in an industry by a larger company in the same industry. The strategy is to create economies of scale and “roll up” all...

A tax collected on the sale of goods or services.

A loan offered through the Small Business Administration.

The ability to quickly grow a company without requiring a proportional additional investment in the business to support the growth.

An individual or entity to whom a debtor has made a promise to pay under the terms of a promissory note and security agreement.

An agreement that gives the lender (i.e., seller) a security interest in the assets of the business when the seller is financing a portion of the sale.

A note or loan payable to the shareholder(s) or owner(s) of a business provided in the sale of a company by the buyer.

Pre-tax net income, plus owner’s compensation, interest, depreciation, amortization, discretionary expenses, as well as adjustments for extraordinary, non-operating revenue or expenses, and non-recurring expenses or revenue.

An agreement by and among the shareholders (owners) of a company pertaining to the governance of the company, the rights of the shareholders, the duties of the shareholders, and restrictions...

A government agency that guarantees loans for the purchase of small businesses.

The definition of value used by a business appraiser when appraising a business, such as fair value, fair market value, market value, investment value, strategic value, etc.

A bonus given to employees by the seller to ensure they stay on board after the business is sold.

A transaction structured for legal purposes whereby the buyer purchases the stock, or entity (a stock sale), of the seller, as opposed to purchasing the assets of the seller (an...

A buyer or company that may provide similar or complementary products or services to the target and is often a competitor, supplier, or customer of the target, or one that...

The value of a business to a specific investor, typically a synergistic buyer as opposed to a hypothetical buyer.

Liability that passes from the seller of a business to a buyer of a business by operation of law without an express contractual agreement for the buyer to assume the...

The additional value created by bringing together two entities and pooling their strengths.

A company buyer that brings leverage, or synergies, to a transaction through increased revenues or decreased costs that result from the pooling of two companies’ strengths.

A certificate issued by a government agency stating that no tax is due.

A short summary of a business that does not normally reveal the company’s identity, and is shown to prospective buyers before a non-disclosure agreement is signed.

A document used to outline the key terms of the purchase or sale of a business.

An appraisal performed by an independent party that does not have a vested interest in the transaction.

A form of intellectual property that generally refers to characteristics of the visual appearance of a product or its packaging, or even the design of a building, that signifies the...

Any confidential business information that provides an enterprise a competitive edge.