ANNUAL REPORT 2007 | 2008 - Gimv

GLOSSARY
Blue chip:
a company that is well known and fi nancially reliable.
Call option:
an option that gives the buyer the right to purchase the
underlying security at a pre-set price at a future date.
Carried interest (carry):
the share of the profi t that is paid to the management of a
private equity fund.
Corporate Governance:
rules and behaviours constituting good governance that companies
need to adopt and for which they must give account
(Belgian Corporate Governance code - www.corporategovernancecommittee.be).
Due diligence:
the in-depth analysis and assessment of the commercial,
legal, fi nancial, technical and environmental aspects of a
company targeted for investment.
EBITDA:
earnings before interest, taxes, depreciation and amortization
= operating cash fl ow.
Early stage fi nancing:
fi nancing of companies which have developed their products,
but need additional fi nancial resources to bring them to
market and sell them. Companies at this stage are not yet
developing profi ts.
Exit:
the termination of an investment as private equity investor by
means of IPO, trade sale or secondary buy-out.
Follow-on investment:
investment in a company that has already received venture
capital fi nancing.
Free fl oat:
the portion of a company’s share capital that is freely negotiable
on the stock market.
Growth fi nancing / growth capital:
capital that is invested in an expanding company. These funds
can be used to increase production capacity, for product
development, for marketing or to provide additional working
capital.
Initial Public Offering (IPO):
the introduction (fl otation) of a company onto a stock
exchange.
Internal Rate of Return (IRR):
the return on a yearly basis on an investment.
Lead investor:
the investor in a private equity fi nancing round that makes the
largest investment and is the most involved in the fi nancing
project.
Management buy-out (MBO):
fi nancing where a company’s existing management takes over
a company together with an external fi nancier.
Mezzanine fi nancing:
fi nancing with subordinated loans or convertible bonds. The
risk level of this type of fi nancing lies midway between equity
and bank debt.
Private equity:
investment in non-listed companies.
Put option:
an option that gives the buyer the right to sell at a pre-set
price at a future date.
Risk capital:
see venture capital.
Secondary buy-out:
an exit formula by which an investment company sells its
shareholding in a company to another venture capital provider.
Trade sale:
the sale of a shareholding outside the stock market.
Venture capital:
capital fi nancing of young, fast growing companies.
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