Private Equity and Venture Capital Glossary

Under water option

An option is said to be under water if the current fair market value of a stock is less than the option exercise price. This is also known as 'out of the money.'


An investment bank that chooses to be responsible for the process of selling new securities to the public. An underwriter usually chooses to work with a syndicate of investment banks in order to maximize the distribution of the securities.

Unsecured debt

Debt which does not have any priority in case of dissolution of the company and sale of its assets.