Glossary

100-day plan

Post-close · the first push

The list of actions a sponsor intends to complete in the first months after closing. It takes shape during diligence and gets finished between signing and closing.

2-and-20

Fund term – fee structure

The classic fund fee structure: a 2% annual management fee plus 20% of profits.

The 36 Pilots on Staff Problem

Coined 2026 · Ownership & Structure

The 36 Pilots on Staff Problem is the private-equity image coined by Shayne Fitz-Coy in 2026 for the danger of management running a company for itself instead of for its owners.

363 sale

Credit & restructuring · bankruptcy sale

Also called: Section 363 sale, Asset sale in bankruptcy

A court-approved sale of a bankrupt company’s assets under section 363 of the US Bankruptcy Code. The buyer takes them free and clear of most liens and claims, which is why distressed control usually runs through it.

80/20 rule

Advisor lingo · structuring

Most of the result comes from a minority of the causes: a few customers, products or fixes carry most of the value. The first cut in any analysis is finding which few.

A Player Disease

Coined 2026 · People · talent assessment

Also called: A-player

A Player Disease is the term coined by Shayne Fitz-Coy in 2026 for what a buyer misses about the retain-and-invest tier of a management team: the same people worth keeping are often difficult to manage and hard to work with, and that is part of what makes them A players.

Absentee owner

Ownership & structure

An owner who holds the business but no longer works in it.

Absolute priority rule

Credit & restructuring · bankruptcy law

Bankruptcy’s ordering law: each class is paid in full before the class below gets anything.

Accounts payable

Balance sheet · current liability

Money you owe suppliers for goods or services already received.

Accounts receivable

Balance sheet · current asset

Money customers owe you for goods or services already delivered.

Accredited investor

Fund regulation · investor access

The wealth and income thresholds that legally separate who may buy private offerings from who may not.

Accretion / dilution

Deal math · strategic buyer

Whether an acquisition raises or lowers the buyer’s earnings per share.

Accrual accounting

Accounting · basis

Revenue is recorded when earned and expenses when incurred, regardless of when cash moves.

Adjusted basis

Tax basis · asset sale

An asset’s tax cost after depreciation and improvements. It sets the taxable gain at sale.

Adjusted EBITDA

Valuation & Deal Math

Also called: EBITDA-T, EBITDAAI, EBITDAC

Earnings before interest, taxes, depreciation, and amortization after the adjustments a party proposes, usually the seller first. Adjustments run both ways, and the gap between the seller’s adjusted number and normalized EBITDA is what the buyer’s accountants are hired to close.

Advisory agreement

Deal sourcing · papering the helper

Also called: Advisor agreement, Deal success fee, Success fee

The contract engaging someone to open doors or advise, setting what they are paid and what they may not do with what they learn. A success fee inside it pays only when a deal closes, which buys introductions without a retainer.

Allowance for doubtful accounts

Reading a company · receivables

Also called: Bad debt expense

The slice of receivables a company expects never to collect. The charge that puts it on the income statement is bad debt expense.

Alpha & beta testing

Product stage · diligence claim

Release stages: internal testing, then limited outside users.

Alternative assets

Fund term · asset class

Everything beyond public stocks and bonds.

Amend-and-extend

Credit & restructuring · maturity

Lenders push out a loan’s maturity in exchange for fees or a higher spread instead of forcing a refinancing.

Amend-and-pretend

Credit documents · behavior

An extension granted to avoid recognizing a loss rather than because the borrower can repay.

Anchor investor

Fund term · fundraising

Also called: Lead investor

The first large LP to commit, whose name unlocks the rest of the raise. Usually in exchange for better economics.

Angel investor

Fund term – early-stage investor

A wealthy individual investing personal money in early companies.

Answer-first

Advisor lingo · communication

Leading with the conclusion before the supporting logic, the opposite of building up to a finding step by step.

Anti-dilution

Capital stack · investor protection

Protects earlier investors if a later round prices lower, by adjusting their conversion terms.

Anti-subordination clause

Credit documents · drafting

A provision requiring a lender’s consent before its lien or payment priority can be subordinated. It sits in the negative pledge and intercreditor terms, and courts have held that a general sacred-rights clause does not by itself deliver this protection.

Antitrust & regulatory approval

Fund term · closing condition

Clearance from competition authorities that a deal above a stated size must obtain before it can close.

APV

Valuation method · levered DCF

Also called: Adjusted present value

Adjusted present value: value the business unlevered, then add the tax shield of debt separately. The DCF variant built for LBOs, where leverage changes every year.

Articles of incorporation

Ownership & structure

The founding rulebook registered when a corporation is formed, changeable by shareholder resolution.

Artificial intelligence (AI)

Strategy & markets · technology risk

Also called: AI

Software that performs tasks which used to require a person. In diligence it is a question about whether a company’s product survives.

Asset

Balance sheet · asset side

Anything the company owns that should produce future cash or reduce future costs. Cash, inventory, equipment.

Asset sale vs stock sale

Fund term · legal form

Buying the company’s assets, where the buyer picks what it takes and gets a stepped-up tax basis, versus buying its shares, where everything comes along, liabilities included.

Asset turnover

Efficiency · sales per dollar of assets

How much revenue each dollar of assets produces. Read alongside margin, it separates businesses that earn through volume from those that earn through price.

Asset-based lending

Capital stack · borrowing base

Borrowing sized on receivables and inventory rather than on cash flow. Availability moves with a borrowing base recalculated as often as weekly.

Attribution risk

Fund term · LP diligence

The risk that a departing investor’s claimed track record overstates their own contribution. LPs test it by asking which deals they actually led.

Attrition

Inside the Organization

Also called: Voluntary attrition

People leaving the business, most of it voluntary. A buyer reads the rate as a measure of whether the business will still work after the deal.

AUM

Fund term · scale metric

Also called: Assets under management

Assets under management: the total value of the capital a firm manages for its investors. In private equity it usually means the capital committed to active funds, which is why it measures scale rather than performance.

Back-of-the-envelope

Advisor lingo · analysis

A quick, simplified calculation done with rough numbers to sanity-check an idea before building a detailed model.

Backlog

Service businesses · forward visibility

Work already signed and not yet delivered.

Balance sheet

Financial statement · snapshot

A snapshot of what a company has and owes at one instant. Assets on one side, liabilities and owners’ equity on the other, and the two sides always match.

Balanced scorecard

Advisor lingo · management tool

A management dashboard that tracks customers, processes and people alongside the financials, so a good quarter cannot hide a weakening business.

Bankers Do Banking, You Do Investing

Coined 2026 · Doing Deals

Bankers Do Banking, You Do Investing is the private-equity warning coined by Shayne Fitz-Coy in 2026 against outsourcing investor judgment to the people selling the transaction.

Barriers to entry

Strategy · industry structure

Also called: Exit barrier

Whatever makes it expensive or slow for new competitors to show up. Whatever makes leaving an industry costly, like specialized plants or closure laws.

Basket stacking

Credit documents · drafting

Combining several debt and investment baskets to build capacity the lenders never meant to grant as a whole.

Benchmarking

Advisor lingo · diagnostic

Measuring a company’s numbers against comparable peers or best practice to see where it lags. The comparison set matters more than the metric.

Best practice

Advisor lingo · benchmarking

The way the best-run peers do a task, used as the target for an improvement plan. Verify it is best and practiced.

Beware the Baseline Year

Coined 2026 · Diligence · earnings quality

Beware the Baseline Year is the diligence warning coined by Shayne Fitz-Coy in 2026 for a seller who takes a single unusually good year and forecasts it forward as if it were the run rate.

Bidco

Ownership & Structure · the borrower

The entity that signs the purchase agreement and borrows the acquisition debt.

Billable hours

Service businesses · the unit

Hours a customer can be charged for, as distinct from hours worked. Internal firm time is the other side of it and generates no revenue.

Blind-pool risk

Fund term · LP risk

The LP’s exposure in committing capital to a fund before any deals exist, trusting the GP’s strategy and track record rather than a known asset.

Blocker provisions

Credit documents · drafting

Clauses named after the deals that exposed the loophole.

Board of directors

Ownership & Structure · governance

Also called: Independent director

Elected by shareholders to set policy and hire (or fire) the CEO.

Board pack

Governance · reporting

The document circulated before a board meeting carrying the numbers, the variances and the decisions being asked for. Its quality sets the quality of the meeting.

Boil the ocean

Advisor lingo · scoping

Trying to analyze everything instead of focusing on what matters, a warning against unfocused work.

Bolt-on acquisition

Serial acquirers & holdcos · buy-and-build

Also called: Tuck-in acquisition

A smaller purchase folded into an existing platform for its customers, capabilities, or territory.

Book value

Valuation & deal math · balance sheet

Assets minus liabilities as recorded on the balance sheet. May be far from market value.

Book-to-bill

Service businesses · momentum

New orders booked in a period divided by revenue billed in it. Above one means backlog is growing.

Break-up fee

Deal protection · signed deal

The fee paid for walking away after signing. Also called a termination fee, it prices the risk of a busted deal.

Bridge financing

Capital stack · short-term financing

Short-term money that carries a company to a bigger financing event, like an IPO.

Broken-deal fees

Fund term · deal costs

Diligence and legal costs of deals that die before closing.

Builder basket

Credit documents · drafting

A capacity for dividends or investments that grows with retained earnings over the life of the loan.

Bullet vs amortizing

Capital stack · repayment structure

An amortizing loan repays on a schedule; a bullet repays everything at maturity; a repayment holiday delays the start.

Business broker

Deal sourcing · the small-cap channel

Also called: Broker, Main street broker

The intermediary who lists small privately held companies for sale. Most deals below the bankers’ threshold reach a buyer through one.

Business case

Advisor lingo · deliverable

The written argument for a decision: the problem, the options, the numbers behind the recommended one, and what happens if nothing is done.

Buy It, Make It Better, Sell It

Coined 2026 · Doing deals · what private equity is

Buy It, Make It Better, Sell It is the definition of private equity coined by Shayne Fitz-Coy in 2026, the three acts every case, model and negotiation reduces to.

Buy to sell

Funds & PE business · strategy

A fund’s model of acquiring a business, improving it over a defined holding period and selling it. The holding period is finite by design.

Buy-and-build

Serial acquirers & holdcos · platform strategy

Acquiring one company as a platform and adding smaller ones to it, then selling the combined group. The spread between what the add-ons cost and what the group fetches is where the return sits.

Buy-in

Advisor lingo · change management

Agreement from the people who have to execute a decision, obtained before it is announced. Without it a plan is a document.

Buyout

Private equity · ownership

The purchase of a controlling stake in a business. The buyer gains the power to direct the business through its ownership rights.

The Buyer-Stewardship Standard

Coined 2026 · Ownership & Structure

The Buyer-Stewardship Standard is the framework coined by Shayne Fitz-Coy in 2026 for evaluating whether an acquirer is worthy of owning a mission-driven company.

CAGR

Growth metric · smoothed rate

Also called: Compound annual growth rate

Compound annual growth rate: the smoothed yearly rate that turns the starting number into the ending one. The growth figure every deck quotes.

Call vs put options

Capital stack · option rights

A call is the right to buy, a put the right to sell. Deal documents hide both everywhere.

Cap table

Capital stack · ownership record

Who owns what across every share class, option, and warrant.

The Capacity Paradox

Coined 2025 · Inside the organization · diligence pattern

The Capacity Paradox is the term coined by Shayne Fitz-Coy in 2025 for the condition where everyone at a company is too busy to fix the problems that keep them busy.

Capacity utilization

Operations

How much of what you could produce or deliver you actually did.

Capital allocation

Management · CEO’s job

The CEO’s real job: deciding where each dollar of cash goes.

Capital Allocation Goblin

Coined 2026 · Ownership & Structure · the bad allocator

Capital Allocation Goblin is the term coined by Shayne Fitz-Coy in 2026 for a leader who is bad at capital allocation, spending each dollar where it feels good rather than where it earns.

Capital Allocation Mensch

Coined 2026 · Ownership & Structure · the good allocator

Capital Allocation Mensch is the term coined by Shayne Fitz-Coy in 2026 for a leader who is good at capital allocation, judging every dollar against the same hurdle whatever it is spent on.

Capitalized wages

Reading a company · comparability

Payroll pushed onto the balance sheet instead of through the income statement.

Capitalism with Love

Coined 2025 · Ownership & Structure

Capitalism with Love is the operating philosophy coined by Shayne Fitz-Coy in 2025 for building, buying and leading companies without separating financial performance from human dignity.

CAPM & beta

Valuation · discount rate

The model pricing required return from market risk: risk-free rate plus beta times the market premium. Where discount rates come from.

Captive vs independent fund

Fund term · firm structure

A captive fund invests its parent’s money, a bank’s or an insurer’s; an independent fund raises from outside LPs.

Carry

Fund term – GP compensation

Also called: Carried interest

Carried interest is the general partner (GP)’s contractual share of eligible investment profits. Its percentage, hurdle, catch-up, whole-fund or deal-by-deal waterfall, and clawback depend on the limited partnership agreement (LPA).

Carry taxation debate

Fund term · carry

Whether carried interest deserves capital-gains treatment or ordinary-income tax.

Carve-out

Deal sourcing · carve-out

Buying a division out of a larger parent.

Case / study / engagement

Advisor lingo · project vocabulary

Three interchangeable words consultants use for one client project, from the initial pitch through the final deliverable.

Cash flow statement

Financial statement · period

Where cash came from and went during a period, split into operating, investing, and financing activities.

Cash sweep

Debt terms · where spare cash goes

A loan provision requiring surplus cash to repay debt early rather than being distributed or retained.

Cash yield

Returns · annual cash

The annual cash a deal produces measured against the equity put in. It answers what the investment pays while it is held rather than what it returns at exit.

Cash-on-cash multiple

Return metric

Total cash returned divided by total cash invested, ignoring timing. The guide’s cash-on-cash return is an annual yield; this is the lifetime multiple.

Cash-on-cash return

Return metric · realized cash

Cash received over cash invested, ignoring paper marks. The bluntest honest return measure.

Centralized capital allocation

Operating model · holdco

Every subsidiary sends its free cash to the parent, and the parent decides where it earns the most.

CFIUS

Fund term · regulatory

Also called: Committee on Foreign Investment in the United States

The US committee that reviews foreign acquisitions of American companies for national-security risk, and can block or unwind a deal.

Chairman of the board

Governance · board role

Also called: Executive chairman

Presides over the board. When the chairman is not also the CEO, they stay out of day-to-day management.

Change management

Advisor lingo · operations

The deliberate work of getting people to adopt a new process or structure, with communication, training and incentives, rather than announcing it and hoping.

Chapter 11 bankruptcy

Credit & restructuring · bankruptcy

Reorganization: the company keeps operating while it restructures its debts under a court plan.

Chapter 7 bankruptcy

Credit & restructuring · bankruptcy

Liquidation: operations stop, a trustee sells the assets, proceeds pay the debts in order.

Churn

Revenue quality · retention

Also called: Repeat purchase rate

The share of customers or revenue lost over a period. It sets how much new business is needed before a company grows at all.

CIM

Fund term · documents

Also called: Confidential information memorandum, Confidential investment memorandum

Confidential information memorandum, also called an offering memorandum or information memorandum: the seller’s book describing the business to buyers.

Clawback

Fund term – carry protection

The LPs’ right to take back carry the GP was overpaid when early wins reverse later. Deal-by-deal waterfalls create the most exposure to it, which is why they escrow part of the carry.

Club deal

Doing deals · co-investment structure

Two or more PE firms buying one company together. Sharing the check, the risk, and the governance friction.

Co-investment

Fund term · LP privilege

An LP’s direct investment into a single deal alongside the fund, usually at reduced fees.

COGS

Income statement · direct cost

Also called: Cost of revenue, Cost of sales, Direct labor, Direct labor

Cost of goods sold, also called cost of revenue: the materials, direct labor and other costs tied directly to what you sold. A service business puts the payroll of the people delivering the service here, though where the line falls depends on the accounting policy.

Cohort analysis

Diligence lens · retention

Also called: Cohort retention

Tracking customers by the period they arrived to see retention, churn, and value honestly. Diligence’s favorite lens.

Collateral

Capital stack · debt

Assets pledged to a lender that can be seized on default.

The Comfort Metric

Coined 2025 · Reading a company · measurement

The Comfort Metric is the term coined by Shayne Fitz-Coy in 2025 for a number a struggling company optimizes because it is easy to measure rather than because it matters.

Commitment letters

Doing deals · financing certainty

Signed promises from lenders (debt) and the fund (equity) that the money will be there at closing. Sellers read them before they read your price.

Commitment period & fee step-down

Fund term · fee mechanics

The first years when the fund can call capital for new deals; when it ends, the management fee typically steps down to a percentage of invested (not committed) capital.

Committed capital & capital calls

Fund mechanics · capital calls

Also called: Committed capital, Capital call, Capital calls, Paid-in capital, Paid in capital, Contributed capital, Uncalled capital, Unfunded commitment

Investors commit capital and fund calls under the fund agreement for permitted purposes, which may include investments, fees, expenses and follow-ons. Unfunded commitments are obligations, not cash already held by the fund.

Common stock

Capital stack · equity

Ordinary ownership shares.

Community adjusted EBITDA

Valuation · cautionary tale

The metric WeWork presented in its 2019 filing, which stripped out the cost of running its buildings. Its largest operating expense came out of an operating profit measure.

Comparable companies (comps)

Valuation method · market multiples

A valuation built from what similar businesses trade or transact at, expressed as a multiple of earnings, revenue or another shared metric.

Compounder

Strategy · hold thesis

A business bought because it already works, where the return comes from letting it keep growing under the same model. The compounder screen asks whether a business is worth owning; the Van Horne checklist asks whether it can carry debt.

The Compounder Screen

Coined 2026 · Strategy & Markets

The Compounder Screen is the 5-part rubric coined by Shayne Fitz-Coy in 2026 for identifying businesses with the structural qualities needed for long-term compounding.

Conditions precedent

Deal terms · what must happen before closing

The things that must be satisfied before a deal can close.

Connect Like a Kindergartener

Coined 2026 · Inside the Organization · relationships

Connect Like a Kindergartener is the standard coined by Shayne Fitz-Coy in 2026 for undivided attention in a conversation, taken from how five-year-olds listen to each other.

Consumer price index (CPI)

Strategy & markets · inflation

Also called: CPI, inflation

The standard measure of inflation, tracking what a fixed basket of goods costs a household over time.

Continuation fund

Fund structure · GP-led secondary

Also called: CV, continuation vehicle

A new vehicle the same GP raises to buy one or more companies out of its own older fund, giving existing LPs the choice to cash out or roll over.

Contribution margin

Cost structure · unit economics

Price minus variable cost per unit, where the unit is a widget, an engagement or a billable hour. What each sale contributes toward covering fixed costs.

Control premium

Valuation · what control is worth

The amount paid above a minority-stake value for the right to direct the business. It buys the ability to change management, capital structure and strategy.

Convertible debt

Capital stack · hybrid financing

A loan that can convert into equity: downside protection with upside participation.

Corporate governance

Ownership & Structure · governance

The incentives, safeguards, and processes that keep managers working for owners.

Corporate venture capital

Fund term · investor type

Operating companies running their own venture arms. Investing for strategic windows as much as returns.

Corporation

Ownership & Structure · entity type

A legal entity separate from its owners.

Cost of debt service

Lender metric · cash flow

The cash a company must pay each period for interest and principal. The real constraint on free cash flow in any leveraged deal.

Cost of equity

Discount rate · the equity piece

The return equity investors require for holding the risk. It is usually estimated with the capital asset pricing model as the risk-free rate plus beta times the equity market premium.

Cost segregation

Tax · cash release

A study splitting a building into components with shorter depreciable lives, pulling deductions forward. It releases cash without changing anything about the business.

The Could-Only-Be-You Test

Coined 2026 · Advisor Lingo

The Could-Only-Be-You Test is the admissions and identity test coined by Shayne Fitz-Coy in 2026 for whether a student’s work is specific enough that it could only have come from that person.

Covenant

Capital stack · debt terms

A promise in a loan agreement, like keeping leverage below a threshold.

Covenant headroom

Underwriting · cushion

How far EBITDA can fall before a financial covenant is breached, usually stated as a percentage.

Covenant-lite

Capital stack · credit terms

Loans issued with few or no maintenance covenants.

Credit bid

Credit & restructuring · bankruptcy sale

A secured lender bids its own debt instead of cash to buy the collateral in a bankruptcy sale.

Crisp

Advisor lingo · communication

Advisor slang for an analysis, slide, or argument that is clear, tight, and free of unnecessary detail.

Critical path

Advisor lingo · project management

The sequence of dependent tasks that determines the fastest a project can finish, since delaying any one delays the whole thing.

Cross-sell

Commercial lever · existing customers

Also called: Upsell

Selling a customer something else already in the range, or upselling them to a higher tier of what they already buy. The relationship is owned, so the next sale costs far less than winning a new customer.

Customer acquisition cost

Unit economics · growth cost

What it costs to win one new customer. Against customer lifetime value, it decides whether growth spending is investment or waste.

Customer concentration

Diligence · revenue risk

The share of a company’s revenue that comes from its few largest customers. Once one customer passes a tenth of revenue, buyers and lenders typically treat it as a diligence issue; past a quarter, many will reprice or ask for protection, and a contracted utility customer at 40% can still be fine.

Data room

Deal process · diligence

The secured file store where a seller puts contracts, accounts and other records for buyers to read during diligence.

Days payable outstanding

Working capital · the other side

How long a company takes to pay its suppliers, in days.

Days sales outstanding

Working capital · collection speed

Also called: DSO

How long it takes to collect from customers, measured as average receivables divided by daily credit sales.

DCF

Valuation & deal math · method

Also called: Discounted cash flow

Discounted cash flow.

Deal funnel

Deal process · sourcing

Hundreds screened, dozens examined, a handful closed. A firm reviewing 800 deals to close 5 isn’t inefficient.

Deferred consideration

Doing deals · payment and terms

Part of a purchase price paid after the deal closes. The payment may be fixed or depend on conditions set in the agreement.

The Death of Cheap Debt

Coined 2026 · Capital stack · the 2026 rate regime

The Death of Cheap Debt is the term coined by Shayne Fitz-Coy in 2026 for the shift from four-to-five percent leveraged loans to eight-to-ten percent, which changes how much debt a deal carries and how long a sponsor must hold it.

Debt capacity

Leverage · how much the business can carry

The most debt a business can service from its own cash flow without breaching covenants or starving operations.

The Debt Lightsaber

Coined 2026 · Capital stack · the disciplining effect

The Debt Lightsaber is the image coined by Shayne Fitz-Coy in 2026, extending Aswath Damodaran’s line that equity is a cushion and debt is a sword, itself a reading of Michael Jensen’s free cash flow theory, for the way debt disciplines management by narrowing the options to the highest-return path.

Debt push-down

Capital stack · financing structure

Moving acquisition debt down into the operating company so its own cash flows service it directly.

Debt-for-equity swap

Capital stack · restructuring

Creditors exchange debt claims for ownership in a restructuring. It names the mechanic and says nothing about how the creditor came to hold the debt.

Debt-free cash-free

Doing deals · pricing convention

Also called: Cash-free debt-free, DFCF

The standard pricing convention: the enterprise price assumes the seller keeps the cash and pays off the debt, so equity value gets computed at closing.

Debt-like items

Diligence · pricing

Liabilities that are not borrowings but get deducted from the price as though they were.

Debt/EBITDA multiple

Ratio · leverage

The leverage yardstick: total (or net) debt over EBITDA. Lenders write covenants in it; markets describe eras by it.

Decentralized operating model

Operating model · holdco

Acquired businesses keep their name, their manager, and their daily decisions, while headquarters centralizes only capital, incentives, and the invisible back office.

Deck

Advisor lingo · deliverable

Consulting shorthand for a slide presentation, the standard format advisors use to deliver findings to a client.

Deep dive

Advisor lingo · analysis

A focused, detailed examination of one part of a business or problem after the overview has shown where to look.

Deferred capex

Diligence · red flag

Maintenance spending a seller has postponed, which flatters earnings in the year before a sale. The buyer inherits the bill.

Deferred revenue

Balance sheet · liability

Cash collected before the work is done. A liability that healthy subscription businesses run on.

Deliverable

Advisor lingo · project

Any concrete output an advisor promises to hand over, such as a report, model, or presentation, by an agreed date.

Delta bonus

Compensation · incentive design

An operator bonus paid only on the year-over-year increase in earnings, never on the level.

Denominator effect

Fund term · LP risk

The rise in an LP’s private equity allocation percentage when public markets fall. The private holdings need never change value for it to happen.

Depreciation

Income statement · non-cash expense

Also called: Amortization

Spreading the cost of a physical asset over the years it wears out. Amortization is the same idea applied to intangible assets like patents.

Diligence workstreams

Fund term · deal diligence

Commercial (market and customers), financial (quality of earnings), legal, operational, and HR. Plus vendor due diligence, where the seller commissions the report.

Diligence-adjusted EBITDA

Diligence · quality of earnings

The earnings number the buyer’s advisors will stand behind, after reversing what they disagree with.

Dilution

Cap table · ownership

New shares shrink existing owners’ percentage of the company.

DIP financing

Credit & restructuring · bankruptcy

Debtor-in-possession financing: new super-priority money lent to a company in bankruptcy so it can keep operating through the process.

Direct vs indirect sales

Strategy · sales channel

Your own sales force versus channel partners.

Disclosure schedule

Deal process · the exceptions

Also called: Disclosure schedules, Schedule of exceptions

The seller’s list of exceptions to its own representations. A rep says the business has no litigation, and the schedule names the three cases it has.

Discount rate

Valuation & deal math · time value

The rate used to translate future cash into today’s value. Higher risk, higher rate.

Distressed exchange

Credit & restructuring · restructuring

Bondholders accept new securities worth less than par to avoid a bankruptcy. Rating agencies count it as a default.

Distressed investing

Fund term · strategy

Buying the debt or equity of troubled companies at a discount, betting on a turnaround or a favorable restructuring.

Divestiture

Deal sourcing · divestiture

Also called: Spin-off, Spinoff

A company selling off a business unit or asset, which is where one conglomerate’s divestiture becomes a PE firm’s deal flow. A spin-off distributes the division to shareholders instead of selling it, so it produces no deal.

Dividend recapitalization

Capital stack · recap

The company borrows new debt and pays the proceeds to its owners as a dividend.

Dividend yield

Public markets · shareholder return

Dividends per share over share price. The cash rate shareholders earn at today’s price.

Don’t Manage by Ultimatum

Coined 2026 · Inside the Organization · how to lead

Don’t Manage by Ultimatum is the management rule coined by Shayne Fitz-Coy in 2026 against disciplining a talented person with a threat instead of working the problem with them.

Double taxation

Ownership & Structure · tax treatment

Corporate profits taxed once at the company and again as shareholder dividends.

Double-dip

Credit & restructuring · liability management

One new dollar of debt engineered to hold two claims against the same borrower group, through a guarantee and an intercompany loan.

Down round

Fundraising · valuation

Raising money at a lower valuation than the previous round.

DPI

Fund term – performance metric

Also called: Distributions to paid-in, Distributions to paid-in capital

Distributions to paid-in capital: how much cash the fund has returned to LPs.

Drag-along and tag-along

Shareholder rights · what happens on a sale

Two matching sale rights. A drag-along lets a majority owner force minority holders into a sale, and a tag-along lets minority holders join one on the same terms.

Drill down / double click

Advisor lingo · analysis

Also called: Double click, Peel the onion

To go deeper into one part of an analysis for more detail, moving from a summary to specifics. Also called peeling the onion, layer by layer to the root cause.

Drop-down financing

Credit & restructuring · liability management

Also called: Trap door, Trap-door financing

Assets are moved to an unrestricted subsidiary outside lenders’ collateral, then borrowed against. The trap-door move, famously run on a brand’s intellectual property.

Drummer

Coined term · Inside the Organization · team roles

Drummer is the term coined by Shayne Fitz-Coy for the steady performer who holds the tempo, the middle role in his Drummer, Lead Singer and Groupie reading of a team.

Dry powder

Fund term · capital

Committed capital a fund has not yet invested.

DSCR

Underwriting · coverage ratio

Also called: Debt service coverage ratio

Debt service coverage ratio: cash available for debt service over interest plus scheduled principal. The lender’s first number.

Due diligence

Fund term · diligence

The deep verification work before buying.

Earn-out

Fund term · price

Part of the price paid only if the business hits agreed targets after closing. It bridges a valuation gap between buyer and seller.

Equity ownership

Private equity · ownership

Also called: Equity, Ownership stake

Equity ownership is a stake in a business. Owners share in gains and losses, with rights set by their shares and agreements.

The Earned-Trust Balance Sheet

Coined 2026 · Ownership & Structure

The Earned-Trust Balance Sheet is the framework coined by Shayne Fitz-Coy in 2026 for treating trust as the off-books compounding asset in a people-centered business.

EBIT

Income statement · pre-financing profit

Also called: Earnings before interest and taxes

Earnings before interest and taxes. Profit including all costs except financing and tax.

EBITDA

Income statement · cash-like profit

Also called: Earnings before interest, taxes, depreciation and amortization

Earnings before interest, taxes, depreciation and amortization.

EBITDA add-backs

Valuation · deal math

Also called: Management proposed adjustments, Seller add-backs

Adjustments a seller layers onto reported EBITDA, one-time costs, above-market owner salary, to present ‘adjusted EBITDA’. They go in before the buyer’s team has looked at them.

EBITDA bridge

Valuation · return attribution

A waterfall showing how EBITDA moved between two periods, split into the drivers that moved it.

EBITDA quality

Valuation · earnings trust

How much of a reported earnings figure will actually recur under a new owner. Two companies with the same number can be worth very different multiples.

EBITDA variants

Valuation · sector metrics

Also called: EBITDAR, EBITDARM, EBITDAX, EBIDA

The sector-specific cousins of EBITDA, each adding back the one cost that makes companies in that industry hard to compare. The letter on the end tells you which cost.

Economies of scale

Strategy · cost structure

Unit costs fall as volume grows, favoring the biggest producer.

Elevator pitch / elevator test

Advisor lingo · communication

Summarizing a complex idea or recommendation in the time it takes to ride an elevator, forcing real clarity.

Emerging manager

Fund term · LP program

A first- or second-time fund GP.

Emerging-market risk

Risk category · cross-border

Political and currency risk stack on top of business risk: a great local company can still lose its investors in translation.

End-to-end

Advisor lingo · scope

Covering an entire process from start to finish, rather than just one piece of it.

Enterprise value

Valuation · the whole business

What the whole business is worth regardless of how it is financed: the market value of equity plus debt, preferred stock and minority interest, less cash.

Entry multiple

LBO lever · what you pay

The multiple of earnings paid to buy the business. The buyer decides what to pay on the day of the deal, while the multiple it sells at years later belongs to the market.

EPS

Per-share metric

Also called: Earnings per share

Earnings per share: net income divided by shares outstanding.

Equitable subordination

Credit & restructuring · bankruptcy law

A bankruptcy court demoting one creditor’s claim below the others because of how that creditor behaved. It is the main legal risk in buying debt to control an outcome.

Equity cure

Underwriting · covenant remedy

The sponsor’s right to inject equity and count it as EBITDA to cure a covenant breach, limited in number and amount.

Equity multiple

Return metric

How many times the original equity check came back. MOIC stated on the equity, before or after fees depending on who is quoting it.

Equity ratchet

Capital stack · management incentive

Management’s stake grows, or shrinks, with performance against agreed hurdles.

Equity story

Deal thesis · narrative

The narrative of why this business will be worth more: the three or four believable drivers a buyer or IPO investor is purchasing.

Escrow

Doing Deals

Also called: Escrow release

Part of the purchase price held by a third party after closing, released once the seller’s representations have survived an agreed period. A first tranche usually releases when the price adjustment settles and the rest when the survival period ends.

ESG & impact investing

Fund term · diligence & mandate

Environmental, social and governance factors in diligence and ownership, now standard LP questioning, and funds whose stated goal includes measurable impact.

ESOP

Fund term · exit structure

Also called: Employee stock ownership plan

An employee stock ownership plan. Sometimes the buyer of the company itself, in an employee buyout.

Evergreen fund

Fund structure · no fixed end

A fund with no fixed life, which keeps reinvesting rather than returning capital on a schedule. It removes the pressure to sell a good business because the clock ran out.

Exclusivity

Doing Deals

The period after a letter of intent when the seller may not talk to other buyers. It is the buyer’s protection for the money about to be spent on diligence.

Executive summary

Advisor lingo · communication

The one-page version of a longer document that carries the conclusion and the numbers a decision-maker needs. Written last, read first.

Exit (harvest)

Fund term · returns

How investors get their money out: a sale to a strategic buyer, another sponsor, or an IPO.

Exit drought

Fund term · exit cycle

A period when sponsors cannot sell portfolio companies because buyers and IPO windows have closed. Holding periods stretch and distributions stall.

Exit multiple

LBO lever · what you are paid

The multiple of earnings the business is sold at. Underwriting an exit above the entry multiple is assuming the market will pay more later.

The Expertise Trap

Coined 2025 · Inside the organization · diligence pattern

The Expertise Trap is the term coined by Shayne Fitz-Coy in 2025 for the way a company’s strongest operators design systems that only someone with their experience can run.

Facility rationalization

Value creation · footprint

Closing or combining sites that do not earn their keep. The arithmetic is plain once four-wall economics are visible, and the execution rarely is.

Fact pack

Advisor lingo · deliverable

A slide deck of raw data and analysis assembled to support a case, built before the narrative is written.

Factoring

Capital stack · working capital tool

Selling your accounts receivable to a financial firm for cash now, at a discount.

Fair market value

Valuation · market price

The price a willing, informed buyer and seller would agree on.

Family office

Serial acquirers & holdcos · buyer type

A private investment firm managing one family’s wealth, often buying companies directly with patient capital.

FCCR

Underwriting · coverage ratio

Also called: Fixed charge coverage ratio

Fixed charge coverage ratio: cash earnings over the fixed charges of interest, scheduled principal, rent and maintenance capex. Under 1.0x, the business cannot pay its way.

FCPA & anti-corruption

Legal & compliance risk

Anti-bribery law follows the money across borders.

Feasibility study

Advisor lingo · pre-work

A short study of whether a plan can be done with the money, people and time available, run before anyone commits to it.

Fiduciary duty

Legal duty · governance

The legal obligation to act in the beneficiary’s interest rather than your own.

Financial distress

Capital structure · stress point

When obligations outrun cash. Where covenants, restructuring, and the priority ladder stop being theory.

Firm vs fund

Fund term – organizational structure

The firm is the permanent company (Daebak Capital); each fund is a roughly ten-year vehicle it raises and manages. One firm, many funds, numbered like sequels.

First & second lien

Capital stack · lien priority

Ranked claims on the same collateral: the first lien gets paid from it first, the second lien from what’s left.

First-out / last-out

Credit documents · structure

A split of one loan into a tranche repaid first and a tranche repaid last, which changes each lender’s real risk without changing the loan’s name.

First-Person Data Beats Top-Down Data

Coined 2026 · Doing Deals

First-Person Data Beats Top-Down Data is the diligence principle coined by Shayne Fitz-Coy in 2026 that direct observation can be more valuable than polished financials or abstract market data.

First-principles thinking

Advisor lingo · analysis

Reasoning from basic, verified facts rather than by analogy to how similar problems were solved before.

Five Forces

Strategy · industry analysis

Also called: Differentiation, Focus strategy, Stuck in the middle, Substitute, Substitutes

Porter’s map of industry profitability.

The Five Laws of PE Value Creation

Coined 2026 · Value creation · the five laws

The Five Laws of PE Value Creation is the handout coined by Shayne Fitz-Coy in 2026 that reduces value creation to five rules, scored against a case rather than recited.

Fixed costs

Cost structure

Costs that arrive whether or not you sell anything. Rent, salaries.

Fixed fee

Advisor lingo · fee structure

Advisory work sold at one agreed price for a defined scope. The advisor carries the risk of overrun, which is why scope is fought over.

Football field

Valuation output · summary chart

The one-page chart laying every valuation method’s range side by side. Where the negotiating boundary becomes visible.

Founder transition

People · handover

Moving a business from founder-led to professionally managed without losing what made it work. The question is not when the founder leaves but what has to be true before the company runs without them.

The Founder’s Best-Bid Rule

Coined 2026 · Doing Deals

The Founder’s Best-Bid Rule is the private-equity principle coined by Shayne Fitz-Coy in 2026 that founder-led transactions may not go to the highest price.

Founder-led business

Ownership & structure

A company still run by the person who started it.

Four-wall EBITDA

Unit economics · multi-unit

A single location’s earnings before any corporate cost is allocated to it. The number that says whether the site itself works.

Framework

Advisor lingo · structuring

A structured, reusable way of breaking down a business problem, used to organize analysis before diving into detail.

Fraudulent conveyance

Deal risk · legal

Moving assets out of a company while it is insolvent, or made insolvent by the move, so creditors cannot reach them.

Free cash flow

Cash · the number that services debt

Also called: Levered FCF, Levered free cash flow

The cash a business has left after paying its operating costs and the capital spending needed to keep running. It is the money available to service debt, pay owners, or buy something else.

The Frog-Kissing Problem

Coined 2026 · Doing Deals

The Frog-Kissing Problem is the private-equity metaphor coined by Shayne Fitz-Coy in 2026 for the repetitive work of reviewing many weak deals in search of the rare one worth pursuing.

Fulcrum security

Credit & restructuring · restructuring

The layer of the capital structure where value runs out in a restructuring. Its holders become the new owners.

Fully diluted shares

Share count · what equity value divides by

The share count including everything that could convert into stock: options and warrants, counted with the treasury stock method, plus convertible securities.

Fully loaded costs

Cost accounting · true margin

All-in cost including allocated overhead, rather than just the direct cost.

Fully realized

Fund term · track record

An investment the fund has completely exited and turned into cash returned to LPs. The only status that turns paper marks into a track record.

Fund administrator

Fund term – back-office provider

The third party that keeps the fund’s books. Part of the ecosystem around every fund, along with lawyers and auditors.

Fund closings

Fund term · fundraising stages

Fundraising lands in stages: a first close lets investing start, subsequent closes add LPs, the final close caps the fund.

Fund life

Fund mechanics · lifecycle

A typical closed-end fund runs about ten years: invest in the first half, harvest in the second, extensions if needed.

Fund of funds

Fund term · LP vehicle

A fund that invests in other PE funds. Diversification for investors too small to build their own program.

Fund plumbing

Fund term · fund structure

Feeder funds channel investors in, parallel funds run side-by-side for different jurisdictions or tax needs. Invisible when done right.

GAAP

Accounting · rulebook

Also called: Generally accepted accounting principles

Generally accepted accounting principles. The rulebook auditors hold companies to.

Gantt chart

Advisor lingo · project

A bar chart showing project tasks against a timeline, used to track deadlines and dependencies.

Gap analysis

Advisor lingo · diagnostic

Comparing where a business is against where it needs to be, item by item, so the work in between can be sized and sequenced.

Gatekeeper

Fundraising · LP access

The consultants and advisors who screen funds for institutional LPs.

Generative AI

Strategy & markets · technology risk

Also called: Gen AI, GenAI

AI that produces new text, code, images or audio rather than sorting or scoring what already exists.

The Gimbap Shop at Scale

Coined 2026 · Strategy & Markets

The Gimbap Shop at Scale is the private-equity teaching metaphor coined by Shayne Fitz-Coy in 2026 for showing that the logic of a large buyout can be learned through a single local food business.

Global Financial Crisis (GFC)

Strategy & markets · reference event

Also called: GFC, financial crisis, 2008

The 2007 to 2009 credit collapse that started in US housing and ran through the banking system. It is the reference event most distressed and restructuring vocabulary was written against.

Go Where the Work Happens

Coined term · Inside the Organization · operating discipline

Go Where the Work Happens is the operating system coined by Shayne Fitz-Coy for running a business from the floor rather than the dashboard.

Go-forward compensation

Quality of earnings · the offset

The market-rate cost of replacing an owner who is leaving, subtracted right after the owner’s pay is added back.

Going concern

Valuation · operating assumption

Valuing a business assuming it keeps operating. The opposite pole from liquidation value.

Going private

Deal structure · public-to-private

Also called: Take-private, Taking a company private

Buying out all public shareholders so the company delists. It then runs without quarterly reporting or public shareholders, and many of the largest buyouts in history are take-privates.

The Good Company, Bad Deal Test

Coined 2026 · Doing Deals

The Good Company, Bad Deal Test is the private-equity discipline coined by Shayne Fitz-Coy in 2026 for separating the attractiveness of a company from the attractiveness of the deal being offered.

Good leaver / bad leaver

Capital stack · leaver terms

What happens to a manager’s equity on departure: fair value if the circumstances are good, less or nothing if bad.

Goodwill

Balance sheet · intangible asset

The premium a buyer paid over the value of a company’s net assets.

Governance cadence

Governance · board layer

The fixed board-level calendar of packs, reviews and approvals. It sits above the weekly operating rhythm and decides what reaches the board at all.

GP

Fund term – fund manager

Also called: General partner

The general partner is the entity with the role and authority assigned to it in a limited partnership. The investment manager, advisor, management firm and recipients of carried interest may be separate entities.

GP catch-up

Fund mechanics · waterfall

Also called: Catch-up

After the applicable return of capital and preferred return, the catch-up directs most or all of the next eligible profit distributions to the general partner (GP) until it has received its agreed share of those profits. Returned capital is excluded from that profit base; the partnership agreement determines the calculation and sequence.

GP commitment

Fund term · alignment

The general partner’s own money committed to its fund alongside the limited partners. LPs read the size of it as the clearest statement of alignment in the whole document.

GP stakes

Fund term · GP economics

Buying a minority piece of the management company itself. A share of its fees and carry across every fund, beyond any single one.

Gross profit

Income statement · margin

Revenue minus the direct cost of what was sold (COGS).

Gross vs net returns

Fund term · LP returns

Gross is what the deals earned; net is what LPs keep after fees and carry. The wedge between them is the price of the GP.

Growth equity

Fund term · strategy

Minority stakes in fast-growing companies that don’t need a buyout, sitting between venture capital and LBOs on the risk spectrum.

Harvest period

Fund term – fund lifecycle

The back half of a fund’s life: new deals stop, and the work shifts to improving and exiting what the fund already owns. A ten-year fund typically commits for five and harvests for five.

Hedging & FX risk

Cross-border risk · deal math

Also called: FX, foreign exchange

Cross-border deals earn in one currency and owe in another; hedges cap what the mismatch can cost.

Holdback

Doing deals · payment and terms

Part of a purchase price withheld at closing until agreed release conditions are met, often to cover possible claims or a price adjustment.

The Hidden Power Structure

Coined 2025 · Inside the organization · diligence pattern

The Hidden Power Structure is the term coined by Shayne Fitz-Coy in 2025 for the person who actually runs a company without appearing anywhere on its org chart.

High-yield (junk) bonds

Capital stack · junior debt

Bonds rated below investment grade, paying more because they risk more. They fueled the buyout boom of the 1980s.

Hockey stick growth

Forecast pattern · diligence trap

Flat, flat, then a miraculous up-curve. The shape of nearly every management forecast a buyer is shown.

Hold period

Fund mechanics · time in the deal

How long a fund owns a business before selling it. It converts a multiple of money into an annual return, so the same MOIC over a shorter hold is a higher IRR.

Holding company (holdco)

Serial acquirers & holdcos · parent entity

A parent that owns controlling stakes in operating businesses and does not run them day to day. Its two jobs are choosing operators and allocating the cash they produce.

Holding-company discount

Serial acquirers & holdcos · holdco

A holdco trading for less than the sum of its parts.

How LPs pick GPs

Fund term · GP selection

Three areas dominate LP diligence: the team, the track record, and whether the strategy that produced it is repeatable.

Human and Tools Versus Human and Tools

Coined 2026 · Advisor Lingo

Human and Tools Versus Human and Tools is the AI-era worldview coined by Shayne Fitz-Coy in 2026 for describing the current competitive environment in education and finance.

Hurdle rate

Fund term – carry threshold

Also called: Hard hurdle, Hurdle: soft vs hard, Pref, Preferred return, Soft hurdle

The minimum return LPs receive before the GP starts sharing profits, conventionally 8 percent a year. It is also called the preferred return.

Hypothesis-driven

Advisor lingo · analysis

Forming a best-guess answer early, then running only the analysis needed to prove or disprove it.

The I Can Fix Him Trap

Coined 2026 · Doing Deals

The I Can Fix Him Trap is the private-equity teaching metaphor coined by Shayne Fitz-Coy in 2026 for the danger of falling in love with a broken company because the investor believes they can fix it.

Illiquidity discount

Valuation · private markets

Private stakes price below comparable public ones because you can’t exit at will.

ILPA

Fund term · industry standards

Also called: Institutional Limited Partners Association

The LP trade association whose reporting and fee-disclosure standards discipline GP behavior industry-wide.

Impairment

Balance sheet · writedown

Writing down an asset, often goodwill, when its carrying value can no longer be justified.

In-kind distribution

Fund term · returning capital

A fund returning shares to its investors rather than selling them and sending cash.

Income statement

Financial statement · period

The story of a period: revenue in, expenses out, net income at the bottom. Also called the P&L.

Incremental margin

Unit economics · operating leverage

The margin on the next dollar of revenue rather than the average across all of it. It is what separates a business that scales from one that simply grows.

Indemnity cap

Doing Deals

The ceiling on what a seller can be made to pay back when a representation turns out false. Usually a percentage of the price, with fraud carved out.

Independent sponsor

Serial acquirers & holdcos · deal by deal

A dealmaker with no committed fund who finds a company first and raises the equity deal by deal.

Information asymmetry

Strategy & Markets

Also called: Asymmetric information

Information asymmetry means one side knows something useful that the other side does not.

Institutional investor

Fund term · LP type

The big pools of patient money that can meet PE’s minimums and wait out its holds.

Intercompany loan

Ownership & structure · group funding

Lending between companies inside the same group. It moves cash where it is needed without issuing equity, and tax authorities look hard at the rate.

Interest coverage

Ratio · lender’s view

EBIT over interest expense, the number of times operating profit covers the interest bill. Leveraged finance usually runs the same ratio on EBITDA, which flatters it.

The Internal Ledger

Coined 2026 · Inside the Organization

The Internal Ledger is the framework coined by Shayne Fitz-Coy in 2026 for the private record people keep of unresolved responsibilities, people they may have failed and outcomes they believe should have been better.

Inventory

Balance sheet · current asset

Raw materials, work in process and finished goods waiting to be sold. A service business holds none, and its nearest equivalent is unbilled work.

Inventory days

Working capital · how long stock sits

How long inventory sits before it sells, measured as average inventory divided by daily cost of revenue.

Investment committee

Fund governance · who approves a deal

The group inside a firm that approves or rejects an investment. A deal team brings a recommendation and the committee decides.

Investment memo

Deal process · IC document

The IC paper. Preliminary memo screens the deal in; the final memo commits the fund.

Investment period

Fund mechanics · the window to deploy

The years in a fund’s life when it may still make new investments, usually the first five. After it ends the fund manages and exits what it already owns.

IOI & non-binding offer

Fund term · early offer

The indication of interest: a first-round, non-binding price range that earns you the next data room.

IPO

Fund term · exit route

Also called: Initial public offering

Initial public offering: the company’s first sale of stock to the public market.

IPO process

Exit route · public markets

Underwriters price and place the shares, the roadshow sells the story, the prospectus discloses the risks.

IRR

Valuation & deal math · return metric

Also called: Internal rate of return

IRR is the annualized return implied by how much money you invest, how much comes back, and when each payment occurs.

IRR Grade Inflation

Coined 2026 · Valuation & Deal Math

IRR Grade Inflation is the private-equity teaching term coined by Shayne Fitz-Coy in 2026 for the way fund mechanics can make reported IRR look better without increasing the actual dollars returned to LPs.

Issue tree

Advisor lingo · structuring

A branching diagram that breaks a big business problem into smaller, mutually exclusive sub-questions that can be solved separately.

J-curve

Fund mechanics · return shape

Early fund returns dip negative, fees out, gains not yet realized, then climb as exits arrive. The shape of patience.

Joint venture

Ownership & Structure · business combination

A separate business two or more firms own and operate together.

Key-person risk

Deal risk · people

Also called: Key-person insurance

How much of the business would walk out with one person, whether that’s a founder who holds the customer relationships or, at the fund level, a key-man clause that pauses investing if named partners leave. Key-person insurance pays out if that individual dies or cannot work, which covers the financial hole rather than the operational one.

Kill issue

Fund term · diligence

A diligence finding severe enough to end the deal on its own, such as a broken key contract, a hidden liability, or faked numbers.

Lateness Is a Form of Hostility

Preserved 2026 · Inside the Organization

Lateness Is a Form of Hostility is Jerry Berlin’s maxim, preserved in Shayne Fitz-Coy’s teaching lexicon, for explaining why reliability is relational rather than merely logistical.

LBO

Capital stack · deal structure

Also called: Leveraged buyout

Leveraged buyout: buy a company mostly with debt, pay the debt down with its own cash flows, sell.

Lean and Six Sigma

Advisor lingo · operations

Two operating-improvement disciplines: lean removes waste and waiting from a process, Six Sigma removes variation and defects. Both live on the shop floor rather than in the deck.

Learning Happens in the Struggle

Coined 2026 · Advisor Lingo

Learning Happens in the Struggle is the AI-era teaching principle coined by Shayne Fitz-Coy in 2026 that students learn by wrestling with work. A finished answer skips the part where the learning happens.

Lender-adjusted EBITDA

Underwriting · diligence

The lender’s own EBITDA after stripping add-backs it does not believe. The number the credit committee underwrites.

Lender-on-lender violence

Credit & restructuring · restructuring

The name for LMEs that make one lender group better off at another’s expense inside the same loan.

Letter of intent (LOI)

Deal process · exclusivity stage

Also called: LOI, Letter of intent

A non-binding outline of the price and main terms a buyer signs before full diligence begins. The binding parts are usually exclusivity and confidentiality.

Leverage

Capital stack · debt use

Also called: Debt discipline

Using borrowed money to amplify equity returns, in both directions.

Leveraged loans & CLOs

Capital stack · loan market

Also called: CLO, Collateralized loan obligation, Collateralized loan obligation

The floating-rate bank loans that fund buyouts, and the collateralized loan obligations that package and buy most of them. A CLO issues rated tranches against a pool of those loans, which makes it the largest single buyer of broadly syndicated loans.

Liability

Balance sheet · liability side

What the company owes to outsiders. A bank loan, unpaid bills.

Liability management exercise (LME)

Credit & restructuring · restructuring

Also called: LME, Liability management exercise

A transaction that reshuffles who is owed what without a court, using the loopholes in the loan documents. Uptiers and drop-downs are the main kinds.

Line of credit

Capital stack · debt

A pre-arranged borrowing limit a company can draw and repay as needed.

Liquidation preference

Capital stack · equity terms

The right of preferred investors to get their money out first when a company is sold or wound down.

Liquidation value

Valuation · downside floor

What the assets would fetch if the company stopped and everything was auctioned.

Liquidity runway

Underwriting · cash

Months of cash and undrawn revolver left at the current burn rate.

Listed private equity

Fund term · public PE

PE firms and vehicles that are themselves publicly traded. The industry that takes companies private sells its own shares to the public.

LLC

Ownership & Structure · entity type

Also called: Limited liability company

Limited liability company: liability protection plus pass-through tax, flexible ownership.

Loan-to-own

Fund term · distressed strategy

Buying a troubled company’s debt at a discount to end up owning the business. The name describes the buyer’s intent, and the campaign can end in a swap, a credit bid, a foreclosure or the borrower refinancing the investor out at par.

Lock-up period

Fund term · after a listing

Also called: Lockup, Lock-up

The stretch after an IPO when insiders cannot sell, commonly 180 days. It is why a listing is a partial exit and the sponsor’s real selling starts months later.

Locked box vs completion accounts

Capital stack · pricing mechanism

Two ways to fix the final price: lock it at a past balance-sheet date, or true it up after closing.

Long-stop date

Deal process · signing to closing

The outside date after which either side may walk away from a signed deal. It puts a clock on every condition still outstanding.

Long-term liabilities

Balance sheet · non-current liability

Obligations due beyond one year. The far end of the same schedule.

Loss given default

Lender metric

What a lender loses after a default, once collateral and recoveries are counted. The number that prices a loan’s risk.

Loss leader

Unit economics · pricing tactic

One product sold below profit to pull customers toward the rest.

LP

Fund term – fund investor

Also called: Limited partner

Limited partner: the pension funds, endowments and families whose money the fund invests.

LP advisory committee

Fund term · governance

A small committee of LP representatives that reviews conflicts, valuations, and the consents the LPA requires.

LP direct investing

Fund term · LP behavior

Large LPs skipping funds to buy companies themselves. The logical end of the co-investment road, and the GP’s quiet competitive threat.

LPA

Fund term · governing document

Also called: Limited partnership agreement

The limited partnership agreement: the fund’s constitution, and everything LPs can enforce.

LTV/CAC

Unit economics · customer value

Also called: CLV, Customer lifetime value, LTV

Lifetime value, the total margin a customer is expected to produce across the whole relationship, divided by what it cost to acquire them. It says whether the growth is worth funding, while payback says whether you can afford it now.

Machine learning (ML)

Strategy & markets · technology risk

Also called: ML

The branch of AI where a model learns patterns from data instead of following rules a person wrote.

Maintenance vs growth capex

Reading a company · capex

Also called: capex, capital expenditure

Maintenance capex keeps the existing assets running; growth capex adds capacity.

Make Your Own Movies

Coined 2026 · Advisor Lingo

Make Your Own Movies is the teaching principle coined by Shayne Fitz-Coy in 2026 that students should become creators of judgment, style and work product rather than passive consumers of someone else’s materials.

Management company

Private equity · fund structure

The firm that employs the team and provides investment-management services to a fund. It is distinct from the pool of capital investors commit to that fund.

Management equity alignment

Ownership · incentives

Giving the management team enough equity that they behave like owners. The point is the change in behavior rather than the size of the grant.

Management fee offset

Funds & PE business · fee terms

Fees the GP charges portfolio companies reduce the management fee LPs pay.

Management fee waiver

Fund term · GP economics

A GP giving up management fee in exchange for a profits interest, most often to fund its own commitment. The tax treatment has drawn sustained attention.

Management incentive plan (MIP)

Inside the Organization · management equity

Also called: MIP, Management incentive plan

The equity or option pool set aside for a portfolio company’s managers, typically 5 to 15 percent, and highest at the small end, vesting at the exit. It turns hired managers into co-owners for the length of the hold.

Managing up

Advisor lingo · relationships

Deliberately shaping how you communicate with your own boss or client sponsor to keep the relationship working smoothly.

Margin of safety

Valuation · buyer discipline

Paying enough below your value estimate that being somewhat wrong still isn’t fatal. Benjamin Graham’s idea, from Security Analysis, and the title of Klarman’s 1991 tribute to it.

Mark discretion

Private credit · valuation

A private lender’s latitude in valuing loans it holds, which can hide stress until a default.

Mark-to-market

Valuation · reporting

Valuing a holding at what it would fetch today rather than at cost.

Market capitalization

Public markets · equity value

A public company’s share price times its share count. Equity value, marked to market every second.

Market definition

Market sizing · TAM input

Also called: Market segment

The act of drawing the boundary around a market, deciding which products and which buyers count as inside it. Buyers’ perception sets the boundary, and a segment is a group of them with common needs who respond similarly to the same approach.

Material adverse change

Deal terms · the walk-away clause

A contract provision letting a buyer withdraw if something seriously damaging happens to the business between signing and closing.

Materiality scrape

Doing deals · indemnity

Reading the materiality qualifiers out of the representations when testing for a breach or sizing the loss. It widens what the indemnity actually covers.

Maturity wall

Underwriting · refinancing

A cluster of loans coming due in the same year. A wall is a refinancing risk for the borrower and a pricing moment for lenders.

MBO / MBI

Capital stack · buyout type

Management buyout: the existing team buys the company, usually with PE backing. Buy-in: an outside team does it.

MECE

Advisor lingo · structuring

Also called: Mutually exclusive, collectively exhaustive

Mutually exclusive, collectively exhaustive: a structuring rule that a list of categories has no overlaps and leaves nothing out.

Merger structures

Deal mechanics · legal form

Also called: M&A, mergers and acquisitions

The legal shapes an acquisition can take: a forward merger into the acquirer, a reverse merger where the acquirer merges into the target, a subsidiary merger through a vehicle formed for the deal, and the triangular version of each.

Mezzanine

Capital stack · debt

Debt sitting between senior loans and equity in the payout order. Typically unsecured, with the subordination set by contract rather than by lien, and priced for that risk.

Midco

Ownership & Structure · the middle

An entity inserted between topco and bidco, usually to hold shareholder loans or to sit above the bank debt.

Middle market

Fund term · deal segment

The deal segment between small business and mega-cap. Roughly defined, fiercely contested, and where most PE firms live.

The Minority-Investment Marriage

Coined 2026 · Ownership & Structure

The Minority-Investment Marriage is the private-equity metaphor coined by Shayne Fitz-Coy in 2026 for the binding relationship between a minority investor and a founder who still controls the business.

The Mission Carry Thesis

Coined 2026 · Ownership & Structure

The Mission Carry Thesis is the view coined by Shayne Fitz-Coy in 2026 that mission is a value-bearing asset an owner must carry forward. Reading it as a sentimental constraint on returns misplaces where the value sits.

Moat

Strategy · competitive advantage

Also called: Core competencies, Core competency

A durable advantage that keeps competitors from eroding a company’s returns. These are the core competencies, and everything outside them is a candidate for outsourcing.

MOIC

Valuation & deal math · return metric

Also called: Gross MOIC, Multiple on invested capital, Net MOIC

MOIC compares cash received plus the value still owned with the money invested. A 2.8× multiple means $2.80 of total value for each $1 invested; it does not show how long that took.

Monitoring fee

Funds & the PE Business

An ongoing fee a GP charges a portfolio company for board and oversight work through the hold.

The More-Human Origination Edge

Coined 2026 · Doing Deals

The More-Human Origination Edge is the private-equity view coined by Shayne Fitz-Coy in 2026 that better proprietary deal flow comes from being more prepared, more curious and more human than the other buyers.

Most Businesses Are Frogs

Coined 2026 · Doing Deals

Most Businesses Are Frogs is the private-equity screening metaphor coined by Shayne Fitz-Coy in 2026 for the reality that most deals do not become magical with more attention.

Most Deals Are JAGs

Coined 2026 · Deal sourcing · screening

Most Deals Are JAGs is the screening rule coined by Shayne Fitz-Coy in 2026, borrowing the sports term for just a guy, that most businesses you see are unremarkable and your filter should say pass quickly.

Multiple

Valuation & deal math · pricing shorthand

A shorthand ratio, like 8x EBITDA, borrowed from comparable companies to price a business.

Multiple arbitrage

Serial acquirers & holdcos · roll-up economics

Buying small companies at four to six times earnings and having them valued at eight to twelve times as part of a larger whole.

Multiple consistency rule

Valuation · pairing rule

Enterprise value pairs only with unlevered metrics (sales, EBIT, EBITDA); equity value pairs with levered ones (net income).

Multiple expansion

Return driver · selling higher than you bought

Selling a business at a higher multiple than you paid for it. It is one of the levers in the value creation bridge, alongside revenue growth, margin improvement and debt paydown.

Mutual fund / ETF

Fund term · public markets

Pooled vehicles holding many public companies at once. How ordinary savers own the stock market.

NAV

Valuation · valuation

Also called: Net asset value

Net asset value: what a fund’s holdings are marked at. The number the J-curve is drawn in, and NAV loans borrow against.

NAV facility

Fund term · fund-level debt

Also called: NAV loan

A loan to the fund secured on the value of the portfolio it already owns. It arrives late in a fund’s life, where a subscription line arrives early.

NDA

Doing deals · process sequencing

Also called: Non-disclosure agreement

The non-disclosure agreement signed before the CIM changes hands. The first paper in every process.

Negative working capital

Reading a company · cash conversion

Customers pay before the company pays its suppliers, so growth generates cash instead of consuming it. Subscription and deposit businesses run this way.

Net income (bottom line)

Income statement · bottom line

What remains after every expense is deducted from revenue. The famous bottom line.

Net revenue retention

Revenue quality

What last year’s customers spend this year, including expansion and after churn.

Network effects

Strategy · demand-side scale

The product gets more valuable as more people use it, like telephones.

Newco

Ownership & Structure

A company formed for the deal itself, with no history and no operations of its own.

No-fault divorce

Fund term – LPA clause

An LPA clause letting LPs, by supermajority vote, remove the GP or end the investment period without proving misconduct. Rarely used, always felt.

No-shop vs go-shop

Deal protection · signed deal

A no-shop bars the seller from courting other buyers after signing; a go-shop grants a short window to seek a better price.

NOL

Tax asset · carryforward

Also called: Net operating loss, Net operating loss carryforward

Net operating losses carried forward to offset future taxes. A real asset with a real price in deals.

Non-compete

Deal structure · protection clause

The founder’s promise not to start or join a rival for a period after selling.

Normalized EBITDA

Earnings quality · adjustment

Reported EBITDA restated to show what the business would earn under normal ownership, with one-off items removed and owner-specific costs adjusted.

Notes payable

Balance sheet · current liability

A written promise to repay a stated sum on a stated date. It sits on the balance sheet as debt, current or long-term depending on when it falls due.

NPV

Valuation & deal math · time value

Also called: Net present value

Net present value: what future cash flows are worth today after discounting. Positive NPV means the investment beats its discount rate.

Offbeat Operating Rhythm

Coined 2026 · Value creation · weekly execution

Also called: Operating rhythm

Offbeat Operating Rhythm is the term coined by Shayne Fitz-Coy in 2026 for a company whose operating cadence is out of joint: tone deaf, run on emotion, with norms and behaviors that no longer match the calendar the business is supposed to keep.

On the beach

Advisor lingo · staffing

Consulting slang for a consultant who is between engagements and not currently billed to any client.

Opco

Ownership & Structure · the business

The operating company, the one with the customers, the staff and the factory.

Open-market-purchase exception

Credit documents · drafting

The carve-out letting a borrower buy back its loans from some lenders without offering all of them the same deal. The door most uptiers walk through.

Operating box

Operating model · governance

The agreed set of KPIs, budgets, and strategy limits inside which a portfolio CEO runs the company without interference.

Operating income

Income statement · core profit

Gross profit minus operating expenses. Profit from running the business, before interest and tax.

Operating leverage

Cost structure

High fixed costs make profits swing harder than sales, in both directions.

Operating margin

Ratio · profitability

Operating income over revenue. The engine’s efficiency before financing and tax.

Operations centralization

Value creation · cost lever

Pulling production, sourcing or back office into one place to cut per-unit cost and variability. It needs enough volume to carry the fixed cost of the center.

Optimal stopping

Strategy & Markets

Optimal stopping means deciding when to stop looking for more choices and act on the options available.

Option

Equity comp · instrument

Also called: Option grant, Options grant, Stock option grant

The right, without any obligation, to buy stock at a fixed price for a period. An options grant is the award that gives an employee that right.

Organic vs inorganic growth

Growth quality · multiple driver

Growth from the existing business versus growth bought through acquisition. Buyers pay different multiples for each.

Organizational design

Advisor lingo · operations

Deciding how a company is structured: who reports to whom, where decisions sit, and which functions are shared. Usually the first thing a new owner redraws.

Outsourcing

Ownership & Structure · make vs buy

Buying significant components or services from outside instead of making them in-house.

Owner compensation normalization

Quality of earnings · add-backs

Restating a founder’s pay and perks to what a hired manager would cost. It is the most common and most defensible adjustment in a small-company deal.

Owner earnings

Reading a company · true cash flow

Cash an owner could take out each year after the reinvestment needed to keep the business whole. Buffett’s number, and closer to what a buyer receives than reported profit.

Owners’ equity

Balance sheet · residual claim

What is left for owners after subtracting liabilities from assets. Equity = Assets minus Liabilities.

P&L ownership

Org design · accountability

Also called: Functional structure

Giving one manager full accountability for a unit’s profit and loss instead of a function inside it, which is what decentralized holdcos run on. The alternative is a functional structure, grouping employees by specialty: production, engineering, sales, accounting.

P/E ratio

Ratio · public markets

Price per share over earnings per share. The public market’s everyday multiple.

Paper LBO

Valuation & Deal Math

A leveraged buyout modeled on paper in a few minutes, without a spreadsheet. The standard private equity interview exercise, because it tests whether a candidate can reason about returns rather than operate Excel.

Participating preferred

Capital stack · preferred equity

Preferred stock that takes its preference first and then shares in the remainder. Double dipping.

Pass-through costs

Revenue quality

Also called: Gross billings

Costs billed straight on to a customer at or near no margin, which inflate revenue without adding profit.

Pass-through entity

Ownership & Structure · tax treatment

Profits skip entity-level tax and flow straight to the owners’ returns.

Payback period

Return metric · speed of cash

How long it takes to get the invested cash back. It answers a different question from IRR, which is how fast the money compounds.

People Be Lyin

Coined 2026 · Diligence · verify the numbers

People Be Lyin is the diligence rule coined by Shayne Fitz-Coy in 2026: recalculate every number a seller hands you, because the ones that matter are the ones most worth overstating.

The People Who Howl Back

Coined 2026 · Inside the Organization

The People Who Howl Back is the framework coined by Shayne Fitz-Coy in 2026 for identifying the relationships that answer honest signals of need, remain present when doing so carries a cost and strengthen people through different but responsive voices.

People-First Underwriting

Coined 2026 · Inside the Organization

People-First Underwriting is the acquisition principle coined by Shayne Fitz-Coy in 2026 that the quality, capacity and engagement of the team must be underwritten before the spreadsheet can be trusted.

Permanent capital

Serial acquirers & holdcos · capital source

Money with no fund clock: a holding company, a listed vehicle, or a family balance sheet that never has to sell to return capital.

PIK interest

Capital stack · debt term

Paid-in-kind: interest paid by adding to the principal (or in more preferred shares) instead of cash.

PIK toggle

Credit & restructuring · diagnostic

A loan that lets the borrower pay interest in more debt instead of cash. A borrower flipping to PIK is a liquidity signal.

PIPE

Capital stack · public deal

Also called: Private investment in public equity

Private investment in public equity: a negotiated stake in a listed company, bought directly rather than on the exchange.

Pitchbook

Deal process · banker document

The banker’s pitch deck: why sell, why now, who’ll buy, at what range. The document that starts processes.

Placement agent

Fund term · fundraising

Also called: Placement agency

The intermediary a GP hires to introduce it to limited partners and run the fundraise. Paid a percentage of the capital it brings in.

Platform company

Serial acquirers & holdcos · buy-and-build

The first, larger acquisition in a buy-and-build, chosen for its management, systems, and room to absorb others.

Playback / play back

Advisor lingo · communication

To repeat back what a client or teammate just said, confirming shared understanding before moving forward.

PME

Performance benchmark

Also called: Public market equivalent

Public market equivalent: what the same cash flows would have earned in an index fund.

Portfolio company

Fund structure · what a fund owns

Also called: PortCo

A business owned by a fund, shortened to portco in daily use. The fund holds a portfolio of them, and each is governed separately with its own board, debt and management team.

Post-merger integration

Doing deals · integration

The work after closing that determines whether the deal thesis becomes real.

PPM

Fund term · fundraising document

Also called: Private placement memorandum

The private placement memorandum: the fund’s own offering document to prospective LPs.

Pre-exit normalization

Exit preparation · earnings

Cleaning the profit and loss to show true run-rate economics before a sale process starts. The work begins around two years out, by which time a data room is already too late.

Pre-money / post-money

Valuation · deal math

Also called: Post-money valuation

Company value before an investment goes in, and after. Post-money = pre-money + new cash.

Pre-wire

Advisor lingo · project

Privately briefing key stakeholders on a recommendation before a formal meeting, so there are no surprises when it’s presented.

Precedent transactions

Valuation method · what buyers paid

A valuation built from the prices paid in comparable acquisitions. It usually reads higher than trading comparables, because an acquirer pays a premium for control.

Preemptive rights

Ownership & Structure · shareholder protection

Also called: Pro-rata rights

Existing shareholders’ right to buy into new share issues before outsiders, protecting their percentage.

Preferred bidder

Deal process · auction endgame

The bidder a seller picks to finish the deal, usually with a period of exclusivity. It is a position in an auction, and it is not a signed agreement.

Preferred equity

Capital stack · sponsor financing

Also called: Preferred shares, Preferred stock

A layer ranking above common equity and below all debt, usually carrying a fixed return that accrues. It is paid before common stock and usually carries extra rights, and sponsors use it to add leverage without touching the credit agreement.

Prepackaged bankruptcy

Valuation · court process

A Chapter 11 negotiated with creditors before filing, so the court process is short and controlled.

Pricing power

Strategy · value creation lever

The ability to raise prices without losing customers.

Private credit

Fund term · private lending

Non-bank lending to companies. Direct loans priced above bank debt.

Private equity

Funds & PE business · asset class

Equity investing in privately held companies, from buyouts to growth capital.

Pro forma

Deal structure · financial modeling

Financials restated as if a transaction had already happened. Every deal model is pro forma something.

Programmatic M&A

Serial acquirers & holdcos · acquisition strategy

A steady cadence of small, similar acquisitions run as a repeatable process rather than occasional big bets.

Progress review

Advisor lingo · project

A recurring meeting where an advisory team reports status, findings, and next steps to the client sponsor.

Promotional discipline

Value creation · price lever

Stopping discount leakage so realized price rises without touching the list price. Comps, exceptions and overrides usually give up more margin than the price list ever did.

Proof of cash

Diligence · procedure

Tying the bank statements back to the general ledger, to test whether reported revenue actually arrived.

The Proprietary Alarm

Coined 2026 · Doing Deals

The Proprietary Alarm is the diligence warning coined by Shayne Fitz-Coy in 2026 that investors should become skeptical when a deal is described as proprietary but they did not originate it themselves.

Proprietary vs auctioned deal flow

Doing deals · sourcing channel

Deals sourced through relationships before any banker calls, versus deals bought in a competitive process. Between them sits the broker-referred business, already for sale without yet being an auction.

Provide color

Advisor lingo · communication

To add qualitative context or nuance around a number or finding, beyond just stating the figure itself.

Public equity

Deal fundamentals · ownership type

Shares traded on a stock exchange.

Purchase price adjustment

Deal structure · price adjustment

The true-up after closing that moves the price to reflect the cash, debt and working capital actually delivered. It settles weeks after the money changes hands.

Purchase price allocation

Accounting · post-close

After closing, the price gets allocated across the identifiable assets and liabilities acquired. Whatever the price exceeds their net fair value becomes goodwill on the buyer’s books.

Put the Ladder Down

Coined 2026 · Inside the Organization

Put the Ladder Down is the teaching and mentorship principle coined by Shayne Fitz-Coy in 2026 that success should create access for the people coming behind you.

Pyramid principle

Advisor lingo · communication

The structure behind every good memo and deck.

Quality of earnings (QofE)

Reading a company · earnings review

Also called: AUP, Agreed-upon procedures, QoE, QofE, Quality of earnings, Scope limitation

An accountant’s review of whether reported EBITDA is real, recurring, and correctly timed, prepared for the buyer and its lender. It is where add-backs go to be tested, under agreed-upon procedures that name what was not tested so nobody assumes it was covered.

Quantitative easing (QE)

Strategy & markets · monetary policy

Also called: QE

A central bank buying bonds with newly created money to push long rates down once short rates are already at zero.

Quick ratio (acid test)

Ratio · liquidity

Current assets minus inventory, over current liabilities. Liquidity measured without counting the stuff you still have to sell.

RACI

Advisor lingo · governance

Also called: Responsible, Accountable, Consulted, Informed

A chart naming who is Responsible, Accountable, Consulted, and Informed for each task, used to clarify decision rights.

Retrade

Doing deals · payment and terms

An attempt to change deal terms after buyer and seller have reached an understanding in principle, often by lowering the price.

RVPI

Private equity · performance metric

Also called: Residual value to paid-in, Residual value to paid-in capital

RVPI compares the estimated value still held in a fund with capital paid in. It shows remaining value per dollar contributed, rather than cash already returned.

The Ready-to-Compound Test

Coined 2026 · Strategy & Markets

The Ready-to-Compound Test is the diagnostic coined by Shayne Fitz-Coy in 2026 for evaluating whether a company is ready to become a long-term compounding business.

Real assets

Fund term · asset class

Private-capital strategies built on physical assets and contracted cash flows.

Realization rate

Service businesses · pricing leakage

What you actually collect per hour against what your rate card says you charge.

Recharacterization

Credit & restructuring · bankruptcy law

Also called: Debt recharacterization

A court treating what a party called a loan as an equity contribution instead. The claim stops being debt and gets paid last.

Recurring revenue

Reading a company · revenue quality

Revenue that renews without a new sale. Buyers and lenders pay more for it because next year’s cash is already half visible.

Redeemable (straight) preferred

Capital stack · preferred stock

Preferred stock redeemable for face value without conversion rights. The redemption may be the issuer’s call, the investor’s put, or mandatory on a set date.

Redundant employee costs

Quality of earnings · headcount

Payroll for roles the buyer will not keep, added back on the argument that they do not continue.

Related-party rent

Diligence · normalization

Rent paid to an entity the owner controls, which may sit well away from a market rate.

Representations & warranties insurance

Doing deals · risk transfer

A policy that pays the buyer for a breach of the seller’s representations, standing in for an escrow or an indemnity from the seller. It lets a seller walk away at closing with the full price.

Reps, warranties & indemnities

Doing deals · contract mechanics

The seller’s sworn statements about the business, and the payback mechanism (often via escrow) when one turns out false. Where diligence findings become contract.

Reservation price

Negotiation · walk-away number

Also called: Walk-away price

The walk-away number each side holds privately. Negotiation is the search for overlap between two reservation prices.

Restructuring charge

Reading a Company

A one-off cost booked for closing a site, cutting a division or paying people to leave. It is the add-back a buyer looks at hardest, because it recurs in businesses that restructure often.

Retail investor

Fund term · LP type

An individual investing personal savings. PE’s newest and most debated audience, courted through evergreen and semi-liquid vehicles.

Retainer

Advisor lingo · fee structure

A standing monthly fee that keeps an advisor available whether or not work is used that month. Common for lawyers, bankers and board advisors.

Revenue (top line)

Income statement · top line

Sales. It sits at the top of the income statement, which is why people call it the top line.

Revenue cut-off

Reading a company · recognition

Testing whether a sale landed in the period the books put it in.

Revenue driver

Reading a company · driver

A factor that materially moves revenue, such as an airline’s load factor. Its counterpart on the cost side is a cost driver.

Revenue hierarchy

Revenue quality · the ladder

A ranking of revenue by how hard it is for the customer to leave, from a binding contract at the top down to a transaction that cannot happen twice.

Revolving credit facility

Debt · the flexible line

A credit line a business can draw, repay and draw again, used to fund working capital swings rather than the purchase itself.

Right of first refusal

Ownership & Structure · transfer restrictions

The right to match any third-party offer before the asset can be sold to them.

Right-size(d)

Advisor lingo · euphemism

To adjust headcount or costs, usually downward, to match the actual scale of the business; a common euphemism for cuts.

River Guide

Deal sourcing · introductions

Also called: River guides

A retired operator or trade-association figure engaged to introduce a searcher to owners in their industry. The job is to get a business owner to take the call.

ROE

Ratio · return

Also called: Return on equity

Return on equity: net income divided by common equity. How hard the owners’ money is working.

ROIC

Return metric · capital efficiency

Also called: Invested capital, Return on invested capital

Return on invested capital: operating profit after tax over the capital employed. The owner’s test of whether growth creates value or consumes it.

Roll-up

Serial acquirers & holdcos · consolidation strategy

Buying many small companies in one fragmented industry to assemble one large one, the consolidation play. Fragmentation is the precondition; integration is the work.

Rollover equity

Deal structure · seller stake

The seller reinvests part of their proceeds into the new deal.

Rounds of financing

Fund term · startup financing

Startups raise in stages. Seed, then lettered rounds as milestones are hit.

Royalty stream

Business model · licensing

Recurring fee income from letting someone else operate under your brand or system. It trades unit economics for capital-light growth.

Run-rate

Normalization

Also called: Run-rate EBITDA

A recent period annualized, used as a stand-in for the forward year.

S corporation

Ownership & Structure · entity type

A small corporation electing pass-through taxation, with limits on who can own it.

S&P 500

Fund term · benchmark

Also called: S&P, Standard and Poor’s 500

The index of 500 large listed US companies, and the usual public benchmark a private equity fund is measured against.

Sacred rights

Credit & restructuring · credit documents

Also called: Reserved matters

Loan terms that cannot be amended without every affected lender’s consent, usually pro rata payment and maturity. Whether they cover lien priority depends on the drafting.

Sale-leaseback

Capital stack · asset move

Sell the company’s real estate for cash today, lease it back and pay rent forever.

Same-store sales

Operating metric · retail

Growth from locations open more than a year.

Sandbagging

Doing deals · indemnity

Whether a buyer can still claim on a breached representation it already knew about before closing. A pro-sandbagging clause preserves the claim and an anti-sandbagging clause kills it.

Save Your Fancy Models for Later

Coined 2026 · Valuation & Deal Math

Save Your Fancy Models for Later is the private-equity screening rule coined by Shayne Fitz-Coy in 2026 that early deal judgment should eliminate weak opportunities before detailed modeling begins.

Scenario planning

Advisor lingo · forecasting

Working through several plausible futures instead of one forecast, and asking what the business would do in each. The downside case is the one that matters.

Schmuck insurance

Deal structure · seller protection

Also called: Anti-embarrassment clause, Anti-embarrassment provision

A seller’s right to share in upside after the sale, so they are covered against having sold too cheaply. The payout can be cash, a retained minority stake, warrants, or a share of the buyer’s exit proceeds.

Scope creep

Advisor lingo · project

The gradual expansion of a project’s requirements beyond what was originally agreed, usually without extra time or budget.

Search fund

Serial acquirers & holdcos · one searcher, one company

A vehicle funding an individual to find and buy a single business, which they then run. Investors back the searcher before the company is known.

Second bite of the apple

Fund term · rollover

A seller who rolls equity into the buyer’s deal sells the rest at the next exit, often for more than the first bite.

Secondaries

Fund term · LP liquidity

Buying existing LP stakes or whole portfolios mid-fund. Gives sellers early liquidity and buyers a shorter J-curve.

Secondary buyout (sponsor-to-sponsor)

Fund term · exit route

A sale from one private equity firm to another, also called a sponsor-to-sponsor deal. One fund’s exit is the next fund’s entry, and the company keeps a financial owner.

Security package

Capital stack · what backs the loan

The whole set of liens, guarantees and share pledges a lender takes. What matters is not any single piece but whether the package reaches the assets that actually generate the cash.

Selective default

Credit & restructuring · ratings

A rating that means the borrower defaulted on one obligation while paying others, often the label after a distressed exchange.

Self-funding flywheel

Serial acquirers & holdcos · financing

Raise one round of capital, then fund every later acquisition from the subsidiaries’ own cash flow plus modest debt.

Seller’s discretionary earnings (SDE)

Small-business pricing · earnings base

Also called: SDE, Seller’s discretionary earnings

Small-business profit with the owner’s salary, perks, and one-off costs added back, showing what one owner-operator could earn. The usual pricing base for businesses below about $1M of profit.

Senior debt

Capital stack · debt

The loan paid first if things go wrong, so it charges the least.

Sensitivity analysis

Valuation · assumption testing

Rerunning the numbers under different assumptions to see which ones move the answer.

Separately managed account (SMA)

Fund term · single-investor vehicle

Also called: SMA, Fund of one, Managed account

A vehicle a manager runs for one investor, on terms that investor negotiated. Large LPs use it to get their own mandate instead of sharing a blind pool.

Serial acquirer

Serial acquirers & holdcos · buyer type

A company whose repeatable skill is buying and integrating other companies. The corporate cousin of buy-and-build.

Service/product mix

Revenue mix · margin driver

The revenue split between services and products.

Severance

Inside the Organization

What a company pays someone whose job it has ended. The amount is set by law, contract and custom, and by how the owner wants to be remembered.

SG&A

Income statement · operating expense

Selling, general and administrative expense: salaries, rent, advertising, and the other costs of running the machine.

Shadow Systems

Coined 2025 · Inside the organization · diligence pattern

Shadow Systems is the term coined by Shayne Fitz-Coy in 2025 for the undocumented workarounds a frontline builds to keep a broken official process running.

Share buyback

Ownership & Structure · capital allocation

A company repurchasing its own stock. It returns cash while shrinking the share count, often with borrowed money.

Shared services

Inside the Organization

Finance, HR, IT and other functions consolidated once across several business units instead of being run in each. The usual first synergy in a buy-and-build.

Shareholder agreement

Fund term · governance contract

The contract among owners.

Shareholder loans

Capital stack · sponsor debt

The fund lends part of its own equity check as debt to the holdco.

Sharpe ratio

Portfolio math · risk-adjusted return

Excess return over the risk-free rate, divided by volatility. Return per unit of risk taken.

Silver tsunami

Strategy · demographic tailwind

The wave of retiring founder-owners with no successor, putting millions of small companies up for sale. A generational tailwind behind small-cap buyouts and serial acquirers.

The Smiley Face Hack

Coined 2026 · Advisor lingo · interviewing on video

The Smiley Face Hack is the interview trick coined by Shayne Fitz-Coy in 2026: stick a smiley face next to your camera so you read as friendly on a video call.

So what?

Advisor lingo · communication

The question that forces an analyst to state the actual implication of a finding instead of just reporting a number.

Social proof

Strategy & Markets

Social proof means using other people’s choices or approval as a reason to trust something.

Socialize (an idea)

Advisor lingo · communication

To informally share a proposal with stakeholders ahead of time to gather reactions and build support before a decision.

Sole proprietorship

Ownership & Structure · entity type

One owner, no separate entity, unlimited personal liability, one layer of tax.

Sometimes You Have to Get Naked First

Coined 2026 · Inside the organization · negotiating posture

Sometimes You Have to Get Naked First is the leadership rule coined by Shayne Fitz-Coy in 2026 for naming your own weakness before anyone else will. A group that stands at the water’s edge talks about jumping in and nobody does.

Sources & Uses

Deal structure · financing table

The one-page table every deal stands on: where the money comes from (debt, equity, rollover) and where it goes (purchase price, fees, refinancing). The two columns must match.

Sovereign wealth fund

Investor type · state capital

A state-owned investment fund that invests national reserves, often a large limited partner in private equity and increasingly a direct investor.

SPA / definitive agreement

Doing deals · closing contract

Also called: PSA, SPA, Purchase and sale agreement, Sale and purchase agreement, Definitive agreement

The binding contract that transfers ownership, written as the SPA, the PSA or the definitive agreement depending on the desk. It carries the price mechanism, the warranties and what happens if something proves untrue.

Special situations

Investment strategy · opportunistic

The opportunistic bucket.

The Specificity Stack

Coined 2026 · Advisor Lingo

The Specificity Stack is the method coined by Shayne Fitz-Coy in 2026 for turning a generic activity into a distinctive identity signal.

Sponsor

Who is buying

The private equity firm buying the company, also called the financial sponsor. It raises the capital, buys the business, operates it and sells it.

Springing covenant

Underwriting · covenant design

A covenant that is only tested when a trigger happens, typically when the revolver is drawn past a threshold.

SPV / holdco

Capital stack · deal vehicle

The special-purpose entity created to hold the acquisition. The stack of holding companies is where deal structure lives.

Stalking horse

Credit & restructuring · bankruptcy sale

Also called: Stalking-horse bid, Stalking horse bidder

The first bidder in a bankruptcy auction, whose agreed price becomes the floor everyone else has to beat. The role is paid for with a break-up fee and expense reimbursement.

Stapled secondary

Fund term · secondaries

A secondary sale of LP stakes stapled to a commitment to the GP’s next fund.

SteerCo (steering committee)

Advisor lingo · project

The senior client and advisor group that meets periodically to review progress and make the calls on a project.

Step-up

Capital stack · financing rounds

The new round’s share price over the last round’s.

The Steward-Operator

Coined 2026 · Ownership & Structure

The Steward-Operator is the archetype coined by Shayne Fitz-Coy in 2026 for an operator-acquirer who protects and deepens trust instead of extracting it.

Strategic buyer

Fund term · buyer type

An operating company buying for synergies, often able to pay more than a financial buyer.

Straw man

Advisor lingo · problem solving

A deliberately rough first version of an answer put up to be knocked down, so the team argues about something concrete instead of nothing.

Strip sale

Fund term · LP liquidity

Also called: Strip sale of a portfolio

Selling the same slice of every company in a portfolio at once, rather than selling one company whole. It raises cash without choosing which winner to give up.

Structural vs contractual subordination

Capital stack · lender priority

Two ways one lender ends up behind another: by agreement, or by lending to the holding company while someone else lent to the operating company.

Subject-matter expert (SME)

Advisor lingo · staffing

Also called: SME, Subject-matter expert

A person brought into a project for deep knowledge of one industry or function, usually for hours rather than weeks.

Subscription line

Fund term · financing

A credit line secured by LPs’ uncalled commitments. Bridging capital calls delays LP money going in.

Succession planning

People · bench strength

Building the bench so a departure does not stall the business. The diagnostic is simple: if the best manager left tomorrow, who is ready.

Sum-of-the-parts valuation

Serial acquirers & holdcos · holdco

Valuing a multi-business company by valuing each unit separately and adding them up, then comparing the total to the whole.

Survival period

Deal process · after closing

Also called: Survival

How long the seller’s representations stay enforceable after closing. When it expires, a breach discovered the next day is worth nothing.

Sweet equity & envy ratio

Capital stack · management equity

Management’s leveraged slice of equity, priced sweeter than the fund’s money. The envy ratio measures exactly how much sweeter.

Swim lane

Advisor lingo · project

A row in a process diagram assigned to one team or role, showing who does what as a task moves along.

The Swipe-Left Investor Discipline

Coined 2026 · Doing Deals

The Swipe-Left Investor Discipline is the private-equity rule coined by Shayne Fitz-Coy in 2026 that investors create value by quickly rejecting deals that do not deserve deeper attention.

Switching costs

Strategy · competitive dynamics

The pain a customer bears to change suppliers. High switching costs protect revenue.

Syndication

Capital stack · debt distribution

One lead lender arranges the loan, then parcels it out to a group. How billion-dollar debt packages get placed.

Synergies

Doing Deals

Also called: Synergies: revenue vs cost

The savings or extra revenue a buyer expects from combining two businesses, counted at the deal model stage and delivered, or not, afterwards.

T-shirt sizing

Advisor lingo · estimation

Rough-sorting a task or opportunity into small, medium, or large buckets instead of a precise measurement.

Tail-end fund

Fund term · fund lifecycle

A fund near the end of its life holding its last unsold positions.

Take rate

Revenue quality · marketplaces

Also called: Price realization

The share of the money flowing across a platform that the platform keeps.

Tall vs flat organization

Org design · hierarchy

Tall means many management layers between top and bottom; flat means few.

TAM

Strategy · market sizing

Also called: Total addressable market

Total addressable market: everyone who could plausibly buy the product or service.

The Teaching CEO

Coined 2026 · Inside the Organization

The Teaching CEO is the personal brand coined by Shayne Fitz-Coy in 2026 for the leader who teaches as a core act of operating, investing and building companies.

Tender offer

Deal structure · public-to-private

A public offer to buy shareholders’ stock directly at a stated price. The classic route to taking a listed company private.

Term loan

Capital stack · senior debt

Bank debt drawn once and repaid on a schedule. The workhorse of LBO financing.

Term sheet

Capital stack · document

The short document recording the key terms of an investment before full contracts.

Terminal value

Valuation & deal math · DCF component

The value of the business at the end of your projection window.

The Three Confused Interns Problem

Coined 2025 · Advisor Lingo

The Three Confused Interns Problem is the metaphor coined by Shayne Fitz-Coy in 2025 for the way AI systems can misunderstand a portfolio entrepreneur by combining outdated, incomplete and disconnected information.

The Thumb Scanner Principle

Coined term · Inside the Organization · hiring for character

Also called: The Telltale Test

The Thumb Scanner Principle is the hiring test coined by Shayne Fitz-Coy for the one quality training cannot install: you can’t teach someone to give a damn.

Tiger team

Advisor lingo · people

A small, dedicated group pulled together to solve one urgent problem fast, often deployed inside a struggling portfolio company.

Time and materials

Advisor lingo · fee structure

Advisory work billed by hours and expenses as they are used, with no fixed total. The client carries the risk of overrun.

Top-down / bottom-up

Advisor lingo · sizing

Two ways to size a market: starting from a big aggregate figure and narrowing it, or building up from individual units.

Top-quartile

Fund term · performance ranking

Where every GP claims to sit: the top 25% of funds in their vintage.

Topco

Ownership & Structure · the top of the stack

The entity at the top of an acquisition structure, where the equity holders actually sit.

Trade sale

Doing deals · exit route

Selling the portfolio company to a strategic buyer in the same industry. The most common PE exit.

Trading vs transaction multiples

Valuation method · comparable multiples

Multiples from comparable public companies versus from actual completed deals.

Trailing vs forward multiples

Valuation · multiple basis

Valuing on the last twelve months versus on projections.

Tranche

Capital structure · financing slice

One slice of a financing, with its own rank, rate, and terms.

Transaction fee

Funds & the PE Business

Also called: Deal fees

A fee charged to the portfolio company at closing, typically a percentage of enterprise value, for arranging the deal. Most LP agreements now require some or all of these fees to offset the management fee.

Transition services agreement

Deal structure · carve-out mechanics

After a carve-out, the parent keeps running payroll and IT for a fee until the business stands alone.

Treasury stock method

Equity mechanics · share dilution

How diluted share counts are computed: assume options are exercised, then use the cash proceeds to buy back shares, so each option dilutes by only a fraction of a share.

Turd Polishing

Coined 2026 · Value creation · the limit

Turd Polishing is the term coined by Shayne Fitz-Coy in 2026 for the futile attempt to make a bad business good through operational work after buying it.

Turnaround

Strategy · operating risk

Buying a business that needs fixing, where the return depends on operational repair rather than on the business as it already runs.

TVPI

Fund term – performance metric

Also called: Total value to paid-in capital

Total value to paid-in capital: cash returned plus remaining holdings, over what LPs put in.

Unbilled revenue

Working capital · the service equivalent of inventory

Work performed and recognized in revenue that has not yet been invoiced.

Uncertainty Is Toxic

Coined 2026 · Inside the Organization · leading through change

Uncertainty Is Toxic is the management principle coined by Shayne Fitz-Coy in 2026 for the finding that people absorb bad news but cannot absorb not knowing whether bad news is coming.

Underwriting case

Valuation · diligence

The scenario the fund commits money against.

Unit economics

Reading a company · per-unit profit

Also called: Unit-level economics

Profit or loss on a single customer, order, or location after the direct costs of serving it.

Unitranche

Capital stack · private credit

One facility at a single blended rate replacing separate senior and subordinated tranches. The lenders divide the priority between themselves in an agreement the borrower is not party to.

Unlevered beta

Risk measure · stripped of capital structure

Beta with the effect of debt removed, so the risk of the business can be compared across companies financed differently. It is relevered at the target’s own capital structure before use.

Up or out

Advisor lingo · career model

A career model, common at consulting and banking firms, where employees must be promoted on schedule or leave.

Uptier exchange

Credit & restructuring · liability management

A majority lender group exchanges into new super-priority debt, leaving the minority subordinated in the same company.

Utilization rate

Service businesses · the core metric

The share of a team’s available hours that get billed to a customer. In an advisory firm it is the share of a consultant’s time on client work rather than unstaffed.

Valuation

Valuation & deal math

What a business is worth. Always a range built on assumptions, never a single true number.

Value chain

Strategy · industry structure

The linked activities that deliver a product or service, from inbound logistics through to support. Advantage hides in specific links.

Value creation bridge

Valuation · return attribution

The decomposition of an equity gain into its levers. Also called the value bridge.

Value creation plan

Ownership period · playbook

The written playbook for the hold: the three to five initiatives, owners, and dates that turn the deal thesis into EBITDA.

The Value of Modeling Is Dead

Coined 2026 · Career · what finance rewards now

The Value of Modeling Is Dead is the claim coined by Shayne Fitz-Coy in 2026 that financial modeling has been commoditized by AI, leaving deal sourcing as the skill that still pays.

The Van Horne Screen

Coined 2025 · Valuation & Deal Math

The Van Horne Screen is the ten-criteria test coined by Shayne Fitz-Coy in 2025, adapted from James C. Van Horne, for whether a business can carry LBO debt: stable cash flows, low capex, a branded or identifiable product, an established position, low cyclicality, asset backing, low leverage at entry, no dependence on particular people, low R&D intensity, and EBITDA that converts to cash.

A business rarely passes all ten, and which ones it fails decides the answer.

Vaporware

Tech diligence · product claim

Announced product that doesn’t exist yet.

Variable costs

Cost structure

Costs that rise and fall with volume. Materials and commissions in a product business, subcontractors and travel in a service one.

Vendor due diligence

Doing Deals

Also called: VDD

A diligence report the seller commissions before going to market, so every buyer starts from the same set of findings.

Vendor financing

Capital stack · seller financing

Also called: Seller note, Seller financing

The seller lends the buyer part of the price, a seller note. It bridges valuation gaps and signals the seller’s confidence.

Venture capital

Fund term – early-stage investing

Early-stage equity investing in young companies with big upside and high failure rates.

Venture secondaries

Fund term · secondary market

Buying an existing stake in a venture fund or startup from an investor who wants out before the exit. Priced at a discount to the last round.

Vertical integration

Ownership & Structure · production chain

Expanding into other steps of your own production chain.

Vesting

Equity comp · timing

Earning your shares over time instead of all at once. What each slice vests on is the design question: time served, a deal closing, or a return actually delivered.

Vintage

Fund term – fund cohort

The year a fund starts investing. Returns get compared within a vintage.

Voice of customer

Strategy · demand evidence

Structured research into what customers actually value, in their words. It is the input that tells you which lever to pull rather than a marketing spend in itself.

WACC

Valuation method · discount rate

Also called: Weighted average cost of capital

The weighted average cost of capital: each funding source’s cost, weighted by its share of the structure, with debt taken after tax. It is the standard discount rate used in a DCF.

The Walk/Watch/Worry Rule

Coined 2026 · Valuation · pricing decision

The Walk/Watch/Worry Rule is the pricing test coined by Shayne Fitz-Coy in 2026 for reading a price against your own model.

Walmart Marketing

Coined 2026 · Strategy · competing on price

Also called: Cost leadership

Walmart Marketing is the term coined by Shayne Fitz-Coy in 2026 for winning by being the lowest-cost producer in an industry, the strategy Porter called cost leadership.

Warrant

Capital stack · equity kicker

A long-dated right to buy shares at a set price, often attached to junior debt as an equity kicker.

Waterfall

Funds & the PE Business

Also called: American vs European waterfall, American waterfall, Distribution waterfall, European waterfall

The order in which exit proceeds are paid out.

Why LeBron Needs a Coach

Coined 2026 · Inside the Organization · sharpening a thesis

Why LeBron Needs a Coach is the argument coined by Shayne Fitz-Coy in 2026 that the best performers still use outside challenge, which is why an investment committee exists and why analysts work in teams.

Work in process

Working capital

Partly finished output carried on the balance sheet, whether that is half-built widgets or half-delivered engagements.

Worker Bee, Not Thinker

Coined 2026 · Career · using AI

Worker Bee, Not Thinker is the rule coined by Shayne Fitz-Coy in 2026 for using AI second rather than first, on the grounds that anything AI can do is a commodity.

The Worker-Bee AI Rule

Coined 2026 · Advisor Lingo

The Worker-Bee AI Rule is the teaching principle coined by Shayne Fitz-Coy in 2026 that AI should be used as a helper. Judgment stays with the person.

Working capital

Balance sheet · liquidity

Also called: WC

Current assets minus current liabilities. The cash tied up in running the business day to day.

Working capital peg

Deal structure · price adjustment

The agreed normal level of working capital at closing. The main purchase price adjustment.

Working-capital days

Ratio · cash conversion

DSO (days to collect), DSI (days to sell inventory), and DPO (days to pay suppliers), netted together, form the cash conversion cycle. How many days of cash operations trap between paying suppliers and collecting from customers.

Workplan

Advisor lingo · project

A detailed schedule breaking a project into tasks, owners, and deadlines for an advisory team to execute against.

Workshop

Advisor lingo · facilitation

A structured working session where the client team and advisors solve a defined problem together in a room, rather than receiving a presentation.

Zero interest rate policy (ZIRP)

Strategy & markets · rate regime

Also called: ZIRP, zero rates

A central bank holding its benchmark rate at or near zero. Cheap debt raises what a buyer can afford to pay, which is why the private equity boom and the ZIRP years line up.

Zero-based budgeting

Advisor lingo · cost discipline

Building each year’s budget from zero and justifying every line, instead of taking last year’s number and adding a percentage.

Zombie fund

Fund term · fund lifecycle

A fund past its life, holding unsold companies with no prospect of carry, managed for fees. What LPs quietly fear.