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.

Promote

The share of profits that the general partners or fund managers (the searcher) receive as compensation, regardless of whether they contributed any initial capital. It is a performance-based fee.

Platform Acquisition

The initial acquisition made by a private equity firm or search funder, with the intention of using it as a base for future add-on acquisitions in the same industry.

Proprietary Deal

An acquisition opportunity that is sourced directly by the buyer without a competitive bidding process run by an intermediary.

Personal Guarantee (PG)

A legal promise by an individual to repay a company's debt in the event the company defaults. The individual's personal assets can be at risk.