Search Fund Jargon Translator
Clear, plain-English definitions of ETA and dealmaking terms, with practical notes and examples.
Seller Note
A loan provided by the seller to the buyer to cover a portion of the purchase price. It demonstrates the seller's confidence in the business's future success.
Working Capital Peg
A negotiated target for the level of net working capital that the seller must leave in the business at closing. The purchase price is adjusted if the actual amount is different.
Earn-out
A form of deferred payment to the seller, contingent on the business achieving certain performance milestones after the closing.
Sources and Uses
A table that summarizes where the money for an acquisition is coming from (Sources) and how it is being spent (Uses). The total sources must equal the total uses.