Topco
The top holding company within a specified acquisition structure, where investors may hold their equity and management awards may be arranged. It need not be the ultimate parent of every investor’s other entities.
Topco in round numbers
Hypothetical: before an option pool is reserved, a sponsor owns 70% and a rollover investor owns 30%. Assume a pool equal to 10% of post-pool fully diluted equity, proportional dilution of both existing owners, and no other securities. On that basis, the sponsor has 63%, the rollover investor 27%, and the reserved pool 10%. A reserved pool is not necessarily issued shares or awards already granted to management.
Scroll horizontally to read all columns.
| Allocation | Before pool | After pool |
|---|---|---|
| Sponsor | 70% | 63% |
| Rollover investor | 30% | 27% |
| Reserved option pool | 0% | 10% |
| Total | 100% | 100% |
Terms Related to Topco
Midco · Bidco · Opco · Newco · Rollover equity · All of the glossary