New Issue
What is a New Issue? A new issue describes a security – generally equity or debt – that is registered in a publicly-traded market for the first time. A common new issue is known as an Initial Public Offering (IPO), which takes place when a business or company sells securities on a stock market for...
LBO Terms and Definitions
LBO Terms and Definitions A leveraged buyout (LBO) is the acquisition of a target company that is funded using a significant amount of debt. An LBO transaction typically occurs when a private equity (PE) firm borrows as much as they can and funds the balance with equity. An LBO model is built to enable investors...
Fundless Sponsor
What is a Fundless Sponsor? A fundless sponsor is an investment fund that lacks committed equity capital required to complete acquisition transactions up front. Unlike private equity firms that already possess equity capital to finance transactions, fundless sponsors must raise equity and debt financing on a deal-by-deal basis, after signing a Letter of Intent (LOI)....
Investment Teaser
What is an Investment Teaser? An investment teaser is a critical first step for a business in the capital-raising process. The teaser is a brief and confidential document designed both to gauge interest in, and to generate interest from, potential investors or buyers of a company or its securities. It’s used to present an investment...
Greenshoe / Overallotment
What is an Overallotment / Greenshoe Option? An overallotment option, sometimes called a greenshoe option, is an option that is available to underwriters to sell additional shares during an Initial Public Offering (IPO). The underwriters are allowed to sell 15% more shares than the number of shares they originally agreed to sell, but the option must...
