Business Finance Terms, Explained Simply.
Learn more about common financial terms here.
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A non-compete clause prevents the seller from starting or joining a competing business for a defined period after closing; a....
Management continuity is the assurance a buyer seeks that the key people running the business will remain in their roles....
A letter of intent is a non-binding document that outlines the key terms a buyer proposes for acquiring a business,....
An information memorandum, also called a confidential information memorandum or CIM, is the formal document prepared by the seller to....
Indemnities are contractual obligations in a purchase and sale agreement that require the seller to compensate the buyer for specific....
An exclusivity clause is a provision in a letter of intent that prevents the seller from soliciting or entertaining offers....
An equity rollover is an arrangement where the selling owner reinvests a portion of the sale proceeds into the acquiring....
An earnout is a deal structure where a portion of the purchase price is contingent on the business achieving defined....
Due diligence is the formal investigation a buyer conducts into a business before completing a transaction, verifying that what was....
Drag-along rights allow a majority shareholder to compel minority shareholders to join a sale on the same terms; tag-along rights....
A deadlock clause is a provision in a shareholders agreement that provides a defined mechanism for resolving disputes between equal....
Deal structure is the combination of price, payment terms, form of consideration, and post-closing obligations that together define what the....