Glossário

Ratchet/sliding scale

A bonus where capital can be reclaimed by managers of investee companies, depending on the achievement of corporate goals.
Real Options Valuation

This model places a present value on the “real options” available to a company.
Realisation ratios

Benchmark measurements of investment performance which complement IRR. Realisation ratios are distributions to paid-in capital (D/PI), residual value to paid-in capital (RV/PI) and total value to paid-in (TV/PI). These are measures of returns to invested capital. These measures do not take the time value of money into account.
Realised multiple

The ratio of total gain(/loss) to cost of realised investments.
Recapitalisation

Change in a company’s capital structure. For example, a company may want to issue bonds to replace its preferred stock in order to save on taxes. Re-capitalisation can be an alternative exit strategy for venture capitalists and leveraged buyout sponsors.
Redeemable cumulative preference share

A form of preference shares which provide that, if one or more dividends are omitted, these dividends accumulate and must be paid in full before other dividends can be paid on the company’s ordinary shares. Redeemable cumulative preference shares can be refinanced by mezzanine providers, banks and other institutional equity providers, thus allowing the initial investors to recover their investment.
Redemption

Repurchase by a company of its securities from an investor. Often required for preferred stock in private equity financing.
Refinancing bank debt

Financing to reduce a company’s level of gearing.
Relative return

The return an asset achieves over time, when taking into account the overall market, other assets or benchmarks.
Replacement capital (secondary purchase)

Purchase of existing shares in a company from another private equity investment organisation or from another shareholder or shareholders.
Reporting - EVCA Reporting Guidelines

Guidelines set by EVCA concerning reporting practices towards investors. Their aim is improve transparency, so that investors are better able to monitor and evaluate the performance of their investments and to make the asset class more accessible and comprehensible to new and existing investors.
Representations and Warranties (“Reps and Warranties”)

Declarations made by the seller of one or more target companies in relation to the financial, legal and commercial status of the target companies, the financial instruments (to be) issued, the assets owned or used and the liabilities due, and whereby such persons represent and warrant that such declarations are true and correct as of a certain date. The representations and warranties are a standard part of the share-purchase agreement, subscription agreement or asset-purchase agreement, depending on the type of transaction. In the event that the representations and warranties are breached, the beneficiary will be entitled to an indemnity.
Repurchase agreement

An agreement in which a holder of shares agrees that the person from whom it purchased the securities may repurchase them in certain events. In private equity financing rounds, founders may be required to enter into repurchase agreements in which they agree to resell their shares to the company at a fixed price in the event that they leave the company before a given date.
Rescue (or turnaround)

Financing made available to an existing business which has experienced trading difficulties, with a view to re-establishing prosperity.
Residual Value

The estimated value of the assets of the fund, net of fees and carried interest.
Residual value to paid-in capital (RV/PI)

A realisation ratio which is a measure of how much of a limited partner’s capital is still tied up in the equity of the fund, relative to the cumulative paid-in capital. RV/PI is net of fees and carried interest.
Restricted securities

Public securities which are not freely tradable due to securities regulations.
Restrictive covenant

In the context of venture capital, an agreement in which the executive management of an investee company or a private equity fund undertakes not to carry on competing activities.
Retail investor

A non-institutional investor who purchases securities for his own account.
Reversed Merger

Selling your company to a quoted company, by taking a strong equity position in the quoted company.
Roadshow

The process during a public offering or fundraising in which the management of the issuing company and the underwriters meet with groups of prospective investors to stimulate interest in the stock to be offered. Roadshows may be arranged in several cities/countries, and are conducted during the waiting period shortly before the registration statement becomes effective.
Rounds

Stages of financing of a company. A first round of financing is the initial raising of outside capital. Successive rounds may attract different types of investors as companies mature.
RVPI - Residual Value to Paid-In

The RVPI measures the value of the investors’ (Limited Partner’s) interest held within the fund, relative to the cumulative paid-in capital. RVPI is net of fees and carried interest. This is a measure of the fund’s “unrealized” return on investment.

Ratchet/sliding scale

A bonus where capital can be reclaimed by managers of investee companies, depending on the achievement of corporate goals.
Real Options Valuation

This model places a present value on the “real options” available to a company.
Realisation ratios

Benchmark measurements of investment performance which complement IRR. Realisation ratios are distributions to paid-in capital (D/PI), residual value to paid-in capital (RV/PI) and total value to paid-in (TV/PI). These are measures of returns to invested capital. These measures do not take the time value of money into account.
Realised multiple

The ratio of total gain(/loss) to cost of realised investments.
Recapitalisation

Change in a company’s capital structure. For example, a company may want to issue bonds to replace its preferred stock in order to save on taxes. Re-capitalisation can be an alternative exit strategy for venture capitalists and leveraged buyout sponsors.
Redeemable cumulative preference share

A form of preference shares which provide that, if one or more dividends are omitted, these dividends accumulate and must be paid in full before other dividends can be paid on the company’s ordinary shares. Redeemable cumulative preference shares can be refinanced by mezzanine providers, banks and other institutional equity providers, thus allowing the initial investors to recover their investment.
Redemption

Repurchase by a company of its securities from an investor. Often required for preferred stock in private equity financing.
Refinancing bank debt

Financing to reduce a company’s level of gearing.
Relative return

The return an asset achieves over time, when taking into account the overall market, other assets or benchmarks.
Replacement capital (secondary purchase)

Purchase of existing shares in a company from another private equity investment organisation or from another shareholder or shareholders.
Reporting - EVCA Reporting Guidelines

Guidelines set by EVCA concerning reporting practices towards investors. Their aim is improve transparency, so that investors are better able to monitor and evaluate the performance of their investments and to make the asset class more accessible and comprehensible to new and existing investors.
Representations and Warranties (“Reps and Warranties”)

Declarations made by the seller of one or more target companies in relation to the financial, legal and commercial status of the target companies, the financial instruments (to be) issued, the assets owned or used and the liabilities due, and whereby such persons represent and warrant that such declarations are true and correct as of a certain date. The representations and warranties are a standard part of the share-purchase agreement, subscription agreement or asset-purchase agreement, depending on the type of transaction. In the event that the representations and warranties are breached, the beneficiary will be entitled to an indemnity.
Repurchase agreement

An agreement in which a holder of shares agrees that the person from whom it purchased the securities may repurchase them in certain events. In private equity financing rounds, founders may be required to enter into repurchase agreements in which they agree to resell their shares to the company at a fixed price in the event that they leave the company before a given date.
Rescue (or turnaround)

Financing made available to an existing business which has experienced trading difficulties, with a view to re-establishing prosperity.
Residual Value

The estimated value of the assets of the fund, net of fees and carried interest.
Residual value to paid-in capital (RV/PI)

A realisation ratio which is a measure of how much of a limited partner’s capital is still tied up in the equity of the fund, relative to the cumulative paid-in capital. RV/PI is net of fees and carried interest.
Restricted securities

Public securities which are not freely tradable due to securities regulations.
Restrictive covenant

In the context of venture capital, an agreement in which the executive management of an investee company or a private equity fund undertakes not to carry on competing activities.
Retail investor

A non-institutional investor who purchases securities for his own account.
Reversed Merger

Selling your company to a quoted company, by taking a strong equity position in the quoted company.
Roadshow

The process during a public offering or fundraising in which the management of the issuing company and the underwriters meet with groups of prospective investors to stimulate interest in the stock to be offered. Roadshows may be arranged in several cities/countries, and are conducted during the waiting period shortly before the registration statement becomes effective.
Rounds

Stages of financing of a company. A first round of financing is the initial raising of outside capital. Successive rounds may attract different types of investors as companies mature.
RVPI - Residual Value to Paid-In

The RVPI measures the value of the investors’ (Limited Partner’s) interest held within the fund, relative to the cumulative paid-in capital. RVPI is net of fees and carried interest. This is a measure of the fund’s “unrealized” return on investment.

Ratchet/sliding scale

A bonus where capital can be reclaimed by managers of investee companies, depending on the achievement of corporate goals.
Real Options Valuation

This model places a present value on the “real options” available to a company.
Realisation ratios

Benchmark measurements of investment performance which complement IRR. Realisation ratios are distributions to paid-in capital (D/PI), residual value to paid-in capital (RV/PI) and total value to paid-in (TV/PI). These are measures of returns to invested capital. These measures do not take the time value of money into account.
Realised multiple

The ratio of total gain(/loss) to cost of realised investments.
Recapitalisation

Change in a company’s capital structure. For example, a company may want to issue bonds to replace its preferred stock in order to save on taxes. Re-capitalisation can be an alternative exit strategy for venture capitalists and leveraged buyout sponsors.
Redeemable cumulative preference share

A form of preference shares which provide that, if one or more dividends are omitted, these dividends accumulate and must be paid in full before other dividends can be paid on the company’s ordinary shares. Redeemable cumulative preference shares can be refinanced by mezzanine providers, banks and other institutional equity providers, thus allowing the initial investors to recover their investment.
Redemption

Repurchase by a company of its securities from an investor. Often required for preferred stock in private equity financing.
Refinancing bank debt

Financing to reduce a company’s level of gearing.
Relative return

The return an asset achieves over time, when taking into account the overall market, other assets or benchmarks.
Replacement capital (secondary purchase)

Purchase of existing shares in a company from another private equity investment organisation or from another shareholder or shareholders.
Reporting - EVCA Reporting Guidelines

Guidelines set by EVCA concerning reporting practices towards investors. Their aim is improve transparency, so that investors are better able to monitor and evaluate the performance of their investments and to make the asset class more accessible and comprehensible to new and existing investors.
Representations and Warranties (“Reps and Warranties”)

Declarations made by the seller of one or more target companies in relation to the financial, legal and commercial status of the target companies, the financial instruments (to be) issued, the assets owned or used and the liabilities due, and whereby such persons represent and warrant that such declarations are true and correct as of a certain date. The representations and warranties are a standard part of the share-purchase agreement, subscription agreement or asset-purchase agreement, depending on the type of transaction. In the event that the representations and warranties are breached, the beneficiary will be entitled to an indemnity.
Repurchase agreement

An agreement in which a holder of shares agrees that the person from whom it purchased the securities may repurchase them in certain events. In private equity financing rounds, founders may be required to enter into repurchase agreements in which they agree to resell their shares to the company at a fixed price in the event that they leave the company before a given date.
Rescue (or turnaround)

Financing made available to an existing business which has experienced trading difficulties, with a view to re-establishing prosperity.
Residual Value

The estimated value of the assets of the fund, net of fees and carried interest.
Residual value to paid-in capital (RV/PI)

A realisation ratio which is a measure of how much of a limited partner’s capital is still tied up in the equity of the fund, relative to the cumulative paid-in capital. RV/PI is net of fees and carried interest.
Restricted securities

Public securities which are not freely tradable due to securities regulations.
Restrictive covenant

In the context of venture capital, an agreement in which the executive management of an investee company or a private equity fund undertakes not to carry on competing activities.
Retail investor

A non-institutional investor who purchases securities for his own account.
Reversed Merger

Selling your company to a quoted company, by taking a strong equity position in the quoted company.
Roadshow

The process during a public offering or fundraising in which the management of the issuing company and the underwriters meet with groups of prospective investors to stimulate interest in the stock to be offered. Roadshows may be arranged in several cities/countries, and are conducted during the waiting period shortly before the registration statement becomes effective.
Rounds

Stages of financing of a company. A first round of financing is the initial raising of outside capital. Successive rounds may attract different types of investors as companies mature.
RVPI - Residual Value to Paid-In

The RVPI measures the value of the investors’ (Limited Partner’s) interest held within the fund, relative to the cumulative paid-in capital. RVPI is net of fees and carried interest. This is a measure of the fund’s “unrealized” return on investment.

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