Glossary for private markets
A
Annual report
A company's statutory annual report on its finances and operations. It is filed with the Companies Registration Office and is a public document.
Articles of association
The articles of association are a company's foundational rulebook, registered with Bolagsverket, setting out its business, share capital and number of shares, among other things.
B
Bridge financing
Bridge financing is short-term funding that bridges a company's financing needs until the next larger round or event.
Buyout
A buyout is when an investor, often a private equity fund, acquires a controlling stake or the whole company. In a leveraged buyout the purchase is largely debt-financed.
C
Cap table
Ownership table showing the distribution of shares and options among founders, investors, and employees.
Carried interest
Carried interest is the share of profit a fund manager receives as compensation, typically around 20 percent, on top of the ongoing management fee.
Cash flow statement
A cash flow statement shows how money flows in and out of a company over a period, split into operating, investing and financing activities.
Change of ownership
A change of ownership is when the ownership of a company changes, for example when a founder sells their stake or the business passes to new owners.
Class A and Class B shares
Different classes of shares in the same company, where the difference usually lies in voting power rather than in the right to dividends.
Common share
The most common share type giving voting rights and dividend rights after preferred shares.
Company analysis
A company analysis is a systematic review of a company's business, finances and market to assess its value and prospects.
Company valuation
Estimate of a company's total market value, based on latest funding round, multiples, or other methodology.
Consent clause
A clause in the articles of association requiring the company's consent before shares are transferred to a new owner.
Contract note
A contract note is a confirmation of a securities transaction showing the terms: what was bought or sold, quantity, price, fees and settlement date.
Contribution in kind
A contribution in kind (apportegendom) is property — such as a company or a machine — contributed to a company as payment for shares instead of cash.
Controlling owner
A controlling owner is an owner with decisive influence over a company, often through a voting majority or shares with higher voting power.
D
Dilution
Dilution is when your percentage ownership in a company falls, usually because the company issues new shares in a new share issue.
Dividend
A dividend is when a company distributes part of its profit to shareholders. The decision is made by the general meeting and is based on distributable equity.
Drag-along
Clause giving majority shareholders the right to force minority shareholders to sell their shares in an acquisition. See Drag-along & Tag-along.
Due diligence
Thorough investigation of a company — finances, legal, technology, and market — before an investment is made.
E
I
Incentive program
An incentive program lets employees or key people share in the company's value growth, often through options or shares.
Investment Savings Account (ISK)
A Swedish account type for securities that is taxed annually on a standardised basis rather than on sale. Unlisted shares generally may not be held in one.
Investor relations (IR)
Investor relations (IR) is a company's communication with investors, owners and the capital market, for example through reports, updates and meetings.
IPO (Initial Public Offering)
The process of listing a company on a stock exchange, making shares available for public trading.
L
Liquidity
The ability to buy or sell an asset without significantly affecting the price. Unlisted shares generally have lower liquidity.
Liquidity discount
The price deduction (discount) applied when valuing an asset, often an unlisted share, to compensate for the fact that it cannot be easily or quickly sold.
Lock-up period
Contractual period after an IPO during which insiders cannot sell their shares.
M
Majority owner
A majority owner is a shareholder controlling more than half the votes in a company and can therefore push through most decisions.
Minority protection
Minority protection is the set of Companies Act rules that protect smaller shareholders from the majority abusing its power at their expense.
Multiple-based valuation
Multiple-based valuation values a company by comparing ratios, such as EV/EBITDA or P/E, with similar companies or transactions.
O
Option pool
Reserved shares set aside for future incentive programs for employees, consultants, and advisors.
Order placement
Order placement is submitting a buy or sell order — indicating that you want to buy or sell a security at a certain price and quantity.
Ownership register
Alternative term for the share register, which is the registry of all the company's shareholders. See Share Register & Ownership Register.
P
Part-ownership
Part-ownership means owning a share of a company together with others, giving you rights as a shareholder in proportion to your stake.
Post-money valuation
A company's valuation after new capital has been added in a funding round.
Post-sale purchase clause
A formal clause in the articles of association that activates post-sale purchase rights. See Post-sale purchase rights.
Post-sale purchase right (Hembud)
The right to subsequently buy back shares that have been transferred to a new owner. See Post-sale purchase rights.
Pre-emption clause on transfer
A clause in the articles of association forcing a selling shareholder to first offer their shares to the company's existing owners. See Pre-emption rights & Right of first refusal.
Pre-emption right
The right of existing shareholders to buy unlisted shares, for example during a new issue or a sale. See Pre-emption rights & Right of first refusal.
Pre-IPO
The phase before an IPO, when investors can acquire shares at potentially lower valuations.
Pre-money valuation
A company's valuation before new capital from a funding round is added.
Preference share
A share that gives priority to dividends and capital in the event of liquidation compared to ordinary shares.
Price history
Price history is a record of a security's past prices over time, showing how the price has developed.
Private company
The most common format for limited companies. They have at least 25,000 SEK in share capital and may not distribute shares freely to the public.
Private equity
Private equity is investment in unlisted companies, often through funds that buy, develop and sell mature companies. 'Riskkapital' is the Swedish umbrella term.
Private placement
An offering to subscribe for shares or other securities that is directed to a selected, limited group of investors rather than the general public.
Prospectus
A prospectus is a document describing the company and the offer in a securities issue, so investors can make an informed decision.
Public company
A limited company that has at least 500,000 SEK in share capital and is allowed to distribute and market shares to the public.
R
Record date
The record date is the date on which it is determined who is a registered shareholder and therefore entitled to, for example, a dividend or to take part in an issue.
Rights issue
A rights issue is a new share issue where existing shareholders have priority to subscribe for new shares in proportion to their holding.
Risk capital
'Riskkapital' is the Swedish umbrella term for investment in unlisted companies, covering both venture capital and private equity.
Risk premium
The risk premium is the extra return an investor demands for taking on risk, above the risk-free rate.
S
Secondary trading
Trading of existing shares between investors, as opposed to new issuances where the company issues new shares.
Securities depository
Account for holding paper-based or digital securities. Synonymous with share depository.
Securities issue
An issue (emission) is when a company issues new securities, such as shares or bonds. A share issue increases the company's number of shares.
Share certificate
A proof of ownership to a certain number of shares in a limited company, nowadays mostly digitally replaced by the share register.
Share depository (Securities depository)
An account at a bank or online broker where you hold assets such as shares and mutual funds.
Share register
The legally mandated register of all shareholders in a company. Also often called an ownership register. See Share Register & Ownership Register.
Share transfer
A share transfer is when ownership of shares passes from one party to another, for example through purchase, gift or inheritance.
Shareholders' agreement
An agreement between shareholders on how they will act in relation to the company. It is private and binds only the parties who signed it.
SPV (Special Purpose Vehicle)
Entity created specifically to pool investors into a single investment, typically a limited partnership.
Subscription price
The subscription price (emissionskurs) is the price per new share in an issue — what investors pay to subscribe for the shares.
V