Search Fund Jargon Translator
Clear, plain-English definitions of ETA and dealmaking terms, with practical notes and examples.
Confidential Information Memorandum (CIM)
A detailed document prepared by a seller or their advisor that provides prospective buyers with an in-depth look at the business being sold.
Capital Call
The process by which a fund manager (like a search funder) requests committed capital from their investors to make an investment.
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.
Covenant
A condition or restriction included in a loan agreement that the borrower must comply with. Failure to do so can result in a default.
Capital Expenditures (CapEx)
Funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, technology, or equipment.
Compound Annual Growth Rate (CAGR)
The mean annual growth rate of an investment over a specified period of time longer than one year.