Private Equity and Venture Capital Glossary

Venture capital

A segment of the private equity industry which focuses on investing in new companies with high growth rates.

Venture capital method

A valuation method whereby an estimate of the future value of a company is discounted by a certain interest rate and adjusted for future anticipated dilution in order to determine the current value. Usually, discount rates for the venture capital method are considerably higher than public stock return rates, representing the fact that venture capitalists must achieve significant returns on investment in order to compensate for the risks they take in funding unproven companies.


A schedule by which employees gain ownership over time of a previously agreed upon amount of retirement funding or stock options.


The rights of holders of preferred and common stock in a company to vote on certain acts affecting the company. These matters may include payment of dividends, issuance of a new class of stock, merger or liquidation.