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CAGR: Compound Annual Growth Rate. The year over year growth rate applied to an investment or other aspect of a firm using a base amount.
Call Option: The right to buy a security at a given price （or range） within a specific time period.
Capital （or Assets） Under Management: The amount of capital available to a fund management team for venture investments.
Capital Call: Also known as a draw down - When a venture capital firm has decided where it would like to invest, it will approach its investors in order to "draw down" the money. The money will already have been pledged to the fund but this is the actual act of transferring the money so that it reaches the investment target.
Capital Gains: The difference between an asset's purchase price and selling price, when the selling price is greater. Long-term capital gains （on assets held for a year or longer） are taxed at a lower rate than ordinary income.
Capitalization Table: Also called a "Cap Table", this is a table showing the total amount of the various securities issued by a firm. This typically includes the amount of investment obtained from each source and the securities distributed —— e.g. common and preferred shares, options, warrants, etc. —— and respective capitalization ratios.
Capitalize: To record an outlay as an asset （as opposed to an Expense）, which is subject to depreciation or amortization.
Captive funds : A venture capital firm owned by a larger financial institution, such as a bank.
Carried Interest: The portion of any gains realized by the fund to which the fund managers are entitled, generally without having to contribute capital to the fund. Carried interest payments are customary in the venture capital industry, in order to create a significant economic incentive for venture capital fund managers to achieve capital gains.
Cash Position: The amount of cash available to a company at a given point in time. Claim Dilution A reduction in the likelihood that one or more of the firm's claimants will be fully repaid, including time value of money considerations.
Catch-up: This is a common term of the private equity partnership agreement. Once the general partner provides its limited partners with their preferred return, if any, it then typically enters a catch-up period in which it receives the majority or all of the profits until the agreed upon profit-split, as determined by the carried interest, is reached.
Chapter 11: The part of the Bankruptcy Code that provides for reorganization of a bankrupt company's assets.
Chapter 7: The part of the Bankruptcy Code that provides for liquidation of a company's assets.
Chinese wall: A barrier against information flows between different divisions or operating groups within banks and securities firms. Examples include a policy barrier between the trust department from making investment decisions based on any substantive inside information that may come into the possession of other bank departments. The term also refers to barriers against information flows between corporate finance and equity research and trading operations.
Clawback: A clawback obligation represents the general partner's promise that, over the life of the fund, the managers will not receive a greater share of the fund's distributions than they bargained for. Generally, this means that the general partner may not keep distributions representing more than a specified percentage （e.g., 20%） of the fund's cumulative profits, if any. When triggered, the clawback will require that the general partner return to the fund's limited partners an amount equal to what is determined to be "excess" distributions. Click here for more detail
Closed-end Fund: A type of fund that has a fixed number of shares outstanding, which are offered during an initial subscription period, similar to an initial public offering. After the subscription period is closed, the shares are traded on an exchange between investors, like a regular stock. The market price of a closed-end fund fluctuates in response to investor demand as well as changes in the values of its holdings or its Net Asset Value. Unlike open-end mutual funds, closed-end funds do not stand ready to issue and redeem shares on a continuous basis.
Closing: An investment event occurring after the required legal documents are implemented between the investor and a company and after the capital is transferred in exchange for company ownership or debt obligation.
Co-investment: The syndication of a private equity financing round or an investment by an individuals （usually general partners） alongside a private equity fund in a financing round.
Co-Sale Provisions or Rights : Allows investors to sell their shares of stock in the same proportions and for the same terms as the founders, managers, or other investors, should any of those parties receive an offer.
Collar Agreement: Agreed upon adjustments in the number of shares offered in a stock-for-stock exchange to account for price fluctuations before the completion of the deal.