Search Fund Jargon Translator
Clear, plain-English definitions of ETA and dealmaking terms, with practical notes and examples.
Multiple Arbitrage
The value creation strategy of acquiring smaller companies at a low valuation multiple and combining them into a larger entity that can be sold at a higher multiple.
Roll-up Strategy
A strategy of acquiring and merging multiple small companies in the same fragmented market to create a single, larger, and more valuable company.
Proprietary Deal
An acquisition opportunity that is sourced directly by the buyer without a competitive bidding process run by an intermediary.
Intermediary
A firm or individual that acts as an agent for a business owner to manage the sale process of their company.
Transition Services Agreement (TSA)
An agreement where the seller agrees to provide certain services (e.g., accounting, IT, HR) to the buyer for a specified period after closing to ensure a smooth transition.
Key Man Insurance
An insurance policy taken out by a business to compensate for financial losses that would arise from the death or extended incapacity of a critical member of the business.
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.
SBA Loan
A type of business loan in the United States that is partially guaranteed by the Small Business Administration (SBA), a government agency. This reduces the risk for lenders.
Broadly-based Asset
An asset that is not concentrated in a single industry or geographic region. This diversification helps to mitigate risk.
Compound Annual Growth Rate (CAGR)
The mean annual growth rate of an investment over a specified period of time longer than one year.