Search Fund Jargon Translator

Clear, plain-English definitions of ETA and dealmaking terms, with practical notes and examples.

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Preferred Equity

A class of ownership in a company that has a higher claim on its assets and earnings than common stock. It generally pays a fixed dividend.

Common Equity

A class of ownership that represents a residual claim on the company's assets and earnings after all other stakeholders (debt holders, preferred equity holders) have been paid.

Capital Stack

The arrangement of all the different types of capital used to finance a company or acquisition, ordered by seniority.
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