Private Equity and Venture Capital Glossary


Intermediaries which endowments, pension funds and other institutional investors use as advisors regarding private equity investments.

General partner (GP)

A class of partner in a partnership. The general partner retains liability for the actions of the partnership. In the private equity world, the GP is the fund manager while the limited partners (LPs) are the institutional and high net worth investors in the partnership. The GP earns a management fee and a percentage of profits

Going-private transaction

When a public company chooses to pay off all public investors, delist from all stock exchanges, and become owned by management, employees, and select private investors. Also known as a Public-to-private transaction.

Golden handcuffs

Financial incentives that discourage founders and / or important employees from leaving a company before a predetermined date or important milestone.

Grossing up

An adjustment of an option pool for management and employees of a company which increases the number of shares available over time. This usually occurs after a financing round whereby one or more investors receive a relatively large percentage of the company. Without a grossing up, managers and employees would suffer the financial and emotional consequences of dilution, thereby potentially affecting the overall performance of the company.

Growth stage

The state of a company when it has received one or more rounds of financing and is generating revenue from its product or service. Also known as Middle stage.