What is the Philosophy of Accounting? The philosophy of accounting encompasses the general rules, concepts, and ideas surrounding the preparation and auditing of the accounts and financial statements of individuals or companies. Due to the legal ramifications of inaccurate or falsified financial documentation, one of the most fundamental parts of the philosophy is the need…
What is Private Equity Crowdfunding? Private equity crowdfunding refers to the practice of generating funding through the sale of securities such as shares, debts, and convertible notes. It is a new and increasingly popular way for entrepreneurs, early-stage companies, or small businesses to obtain funding. In private equity crowdfunding, the investor secures equity interest or…
What is the Just in Time (JIT) Method? The Just in Time (JIT) style of inventory management – also sometimes referred to as the Toyota Production System (TPS) – is a strategy of managing inventory and/or production that links the ordering of raw materials to production scheduling. It differs from other strategies of inventory maintenance….
What is Due Diligence? Due diligence is a process of verifying, investigating, or auditing a potential deal or investment opportunity to confirm all relevant facts and financial information, and to verify anything else that arises during an M&A or investment process. Due diligence is completed before a deal closes to provide the buyer with an assurance of what they’re…
What is Change of Control? In finance, a Change of Control occurs when there is a material change in the ownership of a company. The exact criteria that determine such a change can vary and are defined by law and through contractual agreements. A change of control clause is often included in creditor pacts and…
What is Divesting? Divesting is the act of a company selling off an asset. While divesting may refer to the sale of any asset, it is most commonly used in the context of selling a non-core business unit. Divesting can be seen as the direct opposite of an acquisition. Divesting can create an injection of…
What is Predatory Lending? Predatory lending refers to the practice of offering and/or supplying a loan that is at best unfair and, at worst, abusive to the party receiving the loan. Predatory lending typically involves two key factors: The lending party creates loan terms that can’t reasonably or effectively be met. The lending party seeks…
Private Equity Transaction Timeline There are various steps involved in a Private Equity Transaction Timeline. The diagram below shows the different steps in a M&A transaction from the private equity side, along with a tentative timeline. Steps in a Private Equity Transaction Timeline 1. Teaser Sent by Bankers One of the first steps of buy-side M&A…
What is a Yellow Knight? A Yellow Knight is a company that attempts to mount a hostile takeover of another company but ends up instead discussing the idea of a merger with the target company. The change in strategy may occur when the targeted company resists the hostile takeover and the acquirer is forced to be…
Capital Raising Process – An Overview This article is intended to provide readers with a deeper understanding of how the capital raising process works and happens in the industry today. For more information on capital raising and different types of commitments made by the underwriter, please see our underwriting overview. Book Building Process During the second…
