Verified Metrics Blog

An Introduction to Fund Administration

Fund administration involves a range of services provided by firms to investment funds, such as hedge funds, private equity funds, and real estate funds.

An Investor's Playbook for Private Equity Secondaries

Discover the types of secondary transactions, key players, benefits, risks, and recent trends in this thriving market. Gain insights into valuation and pricing methods for successful investments.

CEO vs. CFO: difference, duties, rank, and annual salary. 

The CEO and CFO are essential roles in any company. The CEO is responsible for the planning and execution of corporate strategy in the entire company, while the CFO is responsible for the financial ma

Co-Investing 101: A Guide to Partnering with Top Private Equity Firms

Discover the advantages of co-investing with private equity firms. Gain higher returns, lower fees, more control, and direct access to exclusive deals. Learn the key steps, benefits, and risks involve

Controller vs. Bookkeeper: Which One Should You Hire

Trying to figure out the difference between bookkeeping and controller roles in business can be a little confusing. Both positions have their strengths and weaknesses, so assessing your specific needs

Due Diligence Software

Due diligence software simplifies and automates investigating and verifying a business's financial, legal, and operational aspects before finalizing a deal in mergers and acquisitions (M&A).

Features of Virtual Data Rooms

The best virtual data room also lives and dies by its document management capabilities, they provide robust controls over documents to facilitate secure collaboration.

How Data-Driven Venture Capital is Transforming and Empowering Startups

VC has transitioned from relying on qualitative assessments to embracing data-driven approaches. Data-driven funds have demonstrated improved returns by leveraging technology, analytics, and competiti

How Deal Rooms Are Closing the Distance in Virtual Deals

A deal room, or virtual data room, is a secure online platform companies use to store and share confidential information during business transactions.

How To Make An Investment Thesis: Ultimate Guide To Best Investment Decision

Learn how to craft a compelling investment thesis to guide your investing decisions. Developing a thoughtful investment thesis is essential for generating outperformance in the market.

How to value a pre-revenue startup?

Valuing a pre-revenue startup/company can be a difficult process. It differs from a mature business valuation, in which founders review the company's accounting reports to assess its value and prospec

Introduction to De-SPACs

A de-SPAC transaction refers to the process where a privately held company becomes a publicly traded firm by merging with a special purpose acquisition company (SPAC).

Lower Middle Market

A lower-middle market company refers to established, medium-sized businesses that generate annual revenues ranging from $5 million to $50 million.

The Complete Guide to Restructuring Support Agreements: Everything You Wanted To Know About RSAs

A Restructuring Support Agreement (RSA) is a legal contract between a debtor company and certain of its creditors in a Chapter 11 bankruptcy restructuring. Understand how debtors and creditors establi

The Essential Guide to Due Diligence in M&A

Learn about the types of due diligence, key areas to assess, how it impacts deal price, and other aspects that are crucial to your merger and acquisition.

The ultimate guide to building an optimal portfolio

n optimal portfolio also takes into consideration an investor's goals and their comfort level with risk. The objective of a portfolio is to achieve the "frontier," which consists of portfolios that of

Unraveling the Importance of Free Cash Flow Margin

Learn how to enhance profitability, reduce costs, and make efficient capital investments to boost your free cash flow margin. Gain insights into industry benchmarks and best practices for achieving a

Virtual Data Protection: How to Safely Shield Your Digitally Stored Information

Virtual data protection is measures and protocols implemented to ensure the safety of digitally stored information. Following general data protection regulation and security protocols will allow lever

What is a Virtual Data Room and How Do They Benefit Startups?

A virtual data room serves as a platform for storing and sharing confidential documents with authorized individuals. Virtual data rooms offer digital accessibility to protected storage around the cloc

What is a Virtual Data Room for Investors?

For startups and businesses seeking investment opportunities having a data room is essential for managing the due diligence process with potential investors and partners.

What is an Operating Partner?

Operating partners are an essential component within private equity (PE) firms acting as the link between the PE firms and their portfolio companies.

What Makes a Good LBO Candidate

Discover the key financial, operational, and strategic traits that make a company an ideal Leveraged Buyout (LBO) candidate in this comprehensive guide.

Why Redaction Software Matters for Private Equity and Venture Capital Firms

A redaction software helps in eliminating sensitive details like information from various digital files such as PDFs, Word documents, Excel sheets, images, videos, legal documents, papers, and more.

Your Checklist for Buying an Existing Business

Acquiring a business is a commitment, so it's essential to understand your reasons for buying a business, acquiring the business assets and the benefits you expect to achieve.

Your Guide to Understanding Private Equity Placement Agents

Placement agents play a key role in the process of capital raising. Their primary objective is to advise and connect equity funds, real estate funds, and other entities seeking capital with the right

SAFE Note

A SAFE (Simple Agreement for Future Equity) note is an agreement between an investor and a startup to exchange capital for equity at a future date. It is becoming a more favored financing method for s

Adjusted EBITDA

Adjusted EBITDA is a crucial and widely-utilized financial metric to analyze a company's true operating cash flow.

Amortization vs. depreciation: Explained

The business's tax liability can be reduced using the calculated expense amounts. Amortization and depreciation are two primary methods to calculate the asset's value over time. According to the type

An Investor's Guide to Unlocking Accredited Investor Status

Accredited investors meet qualifications and professional criteria to access exclusive investment opportunities. They must meet income and net worth requirements, unlike non-accredited individuals, an

Anti-Dilution Clauses: What You Need to Know Before the Next Round

An anti dilution clause safeguards investors from losing their stake in a company when the firm offers shares at a reduced price in future funding cycles.

Balancing Diverse Interests with Blended Liquidation Preferences

Blended preferences are a type of liquidation preference used in venture capital financing to balance the interests of different investor classes.

Book value of equity

It can be confusing to determine which values most accurately represent the returns potential of a company. Among such vital information is the book value of equity.

Bookings vs. revenue: Understanding the differences and impact on your sales operation

Bookings occur when a client decides to purchase a product and is willing to proceed to take measures to secure the product. Conversely, revenue is when the accounting wizards can justify recognized s

CapEx planning: Definition, importance and best practices

CapEx planning is the process of effectively preparing the funds, resources, and time for the project. to minimize loss, gain a competitive advantage and control the budget.

Capital Calls: The Inside Scoop on Private Equity's Cash Infusions

A capital call occurs when investors are asked to pitch money according to their initial agreement. This helps the fund get fresh capital for investments or supporting current portfolio companies.

Capital gains vs. dividends: What’s the better option?

Capital gain is the profit gained after selling an asset at a higher price than the original cost. A dividend is an interest payment received by investors who hold shares in the company

Capitalization Table (Cap Table)

A capitalization table, commonly referred to as a cap table, is a detailed spreadsheet or ledger that tracks the equity ownership of a company.

Cash coverage ratio made easy

The cash coverage ratio is a metric that measures a company's capacity to pay down its liabilities with its existing cash. It is used to assess a company's liquidity.

Cash Flow After Tax (CFAT): Definition, Calculation, and Importance

Cash flow after tax (CFAT). Your business's cash flow is simply after deducting all cash expenses and tax from the company's before-tax cash flow.

Cohort modeling

Cohort modeling is a statistical technique used to analyze data from a population divided into related groups or cohorts with similar characteristics.

Covariance vs. Variance: Top differences you should know

Covariance and variance are statistical terms that prove instrumental in the financial and investment world. Although they sound similar, they are quite different. By reading this article, you'll be a

Cumulative Dividends 101: A Beginner's Guide to Compounding Payouts

Companies are not legally obligated to pay common stock dividends, whereas cumulative preferred dividends must be paid before others according to the contractual terms between shareholders and the com

Debt to Capital Ratio: Definition, Calculation and Importance

The debt-to-capital ratio evaluates how much debt a company has compared to its overall capital.

EBITDA margin

The EBITDA margin is the ratio of a company's earnings before interest, taxes, depreciation, and amortization (or operating margin) to its total revenue.

EBITDA vs. revenue

EBITDA and revenue are both valuable metrics. EBITDA is a company's operating income, and revenue is a company's total income before deducting any expenses.

Fixed Asset Turnover Ratio

Fixed asset turnover is an efficiency ratio that indicates your company's well or under-performance in generating sales.

Flash Reports: What are they and what makes a good one?

A flash report provides a snapshot of a company's key performance indicators. It helps senior management to assess financial health and identify irregularities

Founder Vesting 101: The Essential Need-to-Knows for Startup Success

Founder vesting is a term used to describe an arrangement among startup founders that limits their control over company shares as time progresses.This way, founders get their stock assigned upfront bu

From Manual to Auto: The Ins and Outs of Automatic Conversions

Automatic share conversion is a contractual provision that allows a company to convert one class of its shares into another class without requiring additional shareholder approval. This happens automa

Full Ratchet Anti-Dilution: Protecting Investors or Punishing Startups?

A full ratchet anti-dilution provision is a protective clause for investors in startup funding rounds. It is designed to maintain an investor's ownership percentage if a company issues shares at a low

General & Administrative expenses as a percentage of revenue

General and Administrative expenses as a percentage of revenue is the proportion of revenue spent on G&A expenditures over a certain period.

Grandfather Rights: How VCs Protect Their Investments Through Generations of Change

Grandfather rights are provisions within the governing documents of a private investment fund that allow private fund managers to retain certain rights or privileges despite changes to applicable laws

Historical cost: How it works, benefits and limitations

The historical cost principle is a conservative accounting principle that stipulates that the recording of asset values on a company's balance sheet must be the same as the original cost at the date o

How Investment Syndicates Can Supercharge Your Portfolio

Investment groups consist of individual investors who combine their resources to tap into investment prospects. These groups function as partnerships with a designated leader in charge of selecting an

How Lead Investors Guide Companies to Success

Lead investors conduct due diligence, set the terms of the investment, and negotiate on behalf of the entire investor syndicate. They take an active role in guiding the startup, and in providing fundi

How Middle Market M&A is Driving the Economy

The mid-market sector includes owned businesses with earnings between $10 million and $1 billion. Even though 3% of all businesses in the US fall into this category, they contribute significantly to t

How Startups Can Recover From a Down Round

A down round refers to a financing event in which a company raises capital by selling shares at a lower valuation than in the previous funding round.

How to Calculate Unit Economics for Your Business

Unit economics are a great tool that can help you better understand the success, profitability and long term sustainability of your business.

How to Keep Private Information Under Lock with NDAs

A Non-Disclosure Agreement is a document that establishes a bond between parties to protect sensitive information, proprietary data, or trade secrets from unauthorized disclosure. It is frequently emp

How Virtual Data Rooms Took Data Sharing into the Digital Age

A virtual data room (VDR) is an online storage platform that allows restricted access to files and information, facilitating sharing and cooperation.

Interest coverage ratio

The interest coverage ratio refers to the length of time, either a number of quarters or years, for which a company's current earnings can cover its interest payments.

Introduction to Deal Flow

Investment deal flow is crucial for venture capital firms and investors when determining the quantity and caliber of investment opportunities for assessment. It allows investors to distribute funds an

Introduction to Senior Securities

Senior securities are either debt or equity instruments and hold a priority claim on a company's assets and profits compared to securities. This seniority gives them preferential rights and provides a

Introduction to Virtual Data Rooms

A virtual data room (VDR) is like a space where important documents and information are stored and shared. It lets authorized individuals access and work together on files for business activities such

IRR vs. ROI: Everything you need to know

The IRR is a discount rate used to assess an investment's profitability. ROl is a key performance indicator for individual investors to evaluate the potential return on businesses.

Key Man Risk: The Person Who Can Make or Break Your Company

Key man risk arises when important figures, like founders, top executives, vice presidents, presidents, or key employees in crucial positions depart or cannot carry out their responsibilities.

Liquidation Preferences

Preferred stockholders get a liquidation preference, which determines the priority for distributing funds during a liquidity event.

Liquidation: The Complete Guide to Selling Off Assets and Closing Up Shop

Liquidation is distinct from bankruptcy as it involves a firm converting assets into cash to repay debts through actions like stopping operations selling assets ending contracts and letting go of empl

Marketing efficiency ratio (MER): What it is and how to calculate it

The marketing efficiency ratio (MER) is an essential tool that clearly indicates a marketing campaign's effectiveness.

Negative Retained Earnings: A Guide for Investors

Negative retained earnings refer to a situation in which a company's accumulated losses are greater than its accumulated profits.

Net book value

Businesses use the net book value to determine whether they have enough liquid assets to pay their liabilities and carry on without taking on further debt.

Operating cash flow

Operating cash flow is a critical financial metric that measures the amount of cash generated from a business's core operations.

Operating income vs. net income

Net income and operating income both measure the profit of a company. Operating income focuses on the core operations, whereas net income determines overall profitability.

Pari Passu Principle

The term “pari passu” refers to the equal treatment and ranking of obligations or creditors in finance. Pari passu means “with equal step” or “on equal footing” and originates from a Latin term.

Pre-tax margin

Pre-tax margin is one of the most popular operating efficiency financial ratios. Learn how to calculate and interpret it with examples!

Private Securities

Private securities enable companies to raise funds by selling ownership shares or issuing debt without having to go through the processes and scrutiny associated with launching an Initial Public Offer

Recapitalization: Altering Debt to Equity Ratio

To recapitalize a business means to reorganize its finances by adjusting the balance between debt and equity. Infusing capital via debt or equity financing can help with day-to-day operations, boost e

Return on assets (ROA) vs. Return on investments (ROI)

ROI expresses the return on financial investment, while ROA measures how effectively a business uses its total or average assets. And both are commonly used to measure a company's efficiency.

Revenue run rate. How to calculate it and when NOT to use it

Revenue run rate estimates how much revenue a company can generate over a certain period (typically a year). Learn the different methods on how to calculate this by reading more.

ROCE: Calculation and implication

ROCE is one of many financial ratios that determines returns on capital employed and companies' ability to generate profits for each dollar of capital invested.

ROI vs. ROE: A guide for small businesses

ROI and ROE are strong indicators of your business's overall health and performance. That information can be used to build your business strategy and improve the financial performance of your small or

Rolling Budget: A Comprehensive Guide For Businesses 

Understand why you business should have a rolling budget and different ways to implement it.

Secondaries Investor

Secondary investors bring liquidity to the equity market by purchasing interests from partners and investment portfolios from other fund managers and asset owners.

Shareholder Limits: Staying Private While Growing Your Business

Companies must track total shareholders and beneficial owners holding stock options. Navigating these limits is crucial as companies grow and raise capital.

Side Letter

A side letter refers to an agreement that startup founders and investors create to supplement the terms of co-investment rights in the financing documents.

Term Sheet

A term sheet is a non-binding legal document that outlines the basic terms and conditions of an investment transaction between two parties - typically between an investor and a startup seeking funding

The Entrepreneur's Guide to Navigating Startup Exit Events

An exit event refers to the various ways in which startup founders, employees, and investors can "exit" their equity positions in a private company and convert their ownership stakes into liquid cash

The Hidden Landmines in Reps and Warranties (and How to Avoid Them)

Representations and warranties cover the purchase agreement, details and circumstances related to the agreements subject matter. They serve as assurances from the seller to the buyer concerning variou

The Hidden Risks of Unfunded Commitments: How to Protect Your Portfolio

An unfunded commitment is a futures contract to provide funding and is subject to certain conditions. It is a liability that is not yet recorded in the balance sheet.

The Insider's Guide to Navigating an IPO

An Initial Public offering (IPO) is when a private company sells its shares to the public. Once the process is complete, the company transitions from a private entity to a public company with shares t

The Investor's Guide to Calculating MOIC Returns

MOIC stands for Multiple on Invested Capital. MOIC shows how much value was generated per $1 of initial capital invested in a deal. It assesses the ROI in comparison to the initial capital investment

Top line vs. bottom line: Definitions and differences

The top line and bottom line figures are two of the most important figures in your income statement. Learn what they are and how you can boost those numbers.

Understanding Financial Due Diligence Accounting

he primary objective of FDD is to detect, analyze and resolve any risks, issues or irregularities prior to entering into commercial deals like mergers and acquisitions, or initial public offerings (IP

Understanding revenue bridge: a guide to managing financial gaps

Making a revenue bridge chart is an important part of any finance team's process for analyzing and showing financial data as it makes it easier to explain the details and factors that affect top-line

Unit contribution margin formula

Every business owner's goal is to have enough money to keep operations running. The unit contribution margin helps a company assess its cost landscape on the most basic level to determine the chances

Unlevered free cash flow (UFCF)

Unlevered free cash flow is the amount of a company's cash flow available before considering its financial obligations. These are the operating cash flow the company is free to use however it likes.

Unlocking Growth and Mitigating Risks: Mastering Reverse Triangular Mergers

A reverse triangular merger is a merge tactic that helps your enterprise combine with an already publicly traded subsidiary or shell company and provides an easier transition towards public trading.

Unlocking Hidden Value: How Equity Kickers Can Sweeten Your Deal

An equity kicker is like a bonus in commercial finance deals. This arrangement involves non-standard rates from lenders and allows them to acquire equity ownership or equity-related benefits if specif

Unlocking the Power of Strategic Investments: A Founder's Playbook

A strategic investor is a company or corporation that invests directly in an external startup or emerging company to gain strategic benefits rather than just financial returns.

Using Deal Sourcing to Uncover Your Next Unicorn Investment

Deal sourcing involves identifying and assessing investment opportunities for venture capital and private equity firms. This guide will equip you with the different methods, strategies and steps in de

Value proposition budgeting: The key to a successful business

Value proposition budgeting is an effective tool for any business looking to allocate resources effectively while gaining a competitive edge through better customer insights and stronger value proposi

VC principal vs. partner: Simple guide to roles in venture capital firms

What are the differences between a VC Principal and VC Partner? Discover the vital role each position plays and whom you should reach out to for funding.

What Are Preemptive Rights?

Preemptive rights grant shareholders priority access for purchasing issued shares and safeguard against any decrease in their ownership proportion.

What Does a DDQ Mean?

A due diligence questionnaire (DDQ) is essential for assessing risks and conducting thorough due diligence. It is used across industries in mergers and acquisitions, vendor assessments, investment due

What is a Business Valuation Software?

A valuation software is a tech tool crafted to assess the worth of a company. It streamlines the task of determining the value of a business offering a method to gauge the reasonable market value of b

What is a Liquidity Event?

A liquidity event allows shareholders of a company to convert their ownership into either liquid assets, cash, or shares in a company. It's an event where a private company becomes publicly owned or a

What is a revolving credit facility?

A revolving credit facility is a credit line between a business and a bank so that the company can access money whenever required.

What is a Right of First Refusal (ROFR)?

Understand a ROFR: grants a priority to the holder with the first opportunity to purchase an asset before it is sold to others. Know its workings, how it is different to its alternatives, key examples

What is an LBO?

A leveraged buyout (LBO) is a transaction in which a company or business is acquired using a significant amount of borrowed money (leverage) to meet the cost of acquisition.

What's a consolidated balance sheet, and how to use it like a pro?

A consolidated balance sheet is a vital financial tool that gives an upper edge to investors and business owners to get familiar with their company's financial performance.

What, why, and how of aggressive market penetration

Aggressive market penetration can be a powerful strategy for businesses looking to quickly establish themselves in a new market or expand their product offerings. However, it requires careful planning

Why Infrastructure Debt Belongs in Your Portfolio

Infrastructure debt provides returns, safeguards against inflation and enhances portfolio variety for investors focused on meeting their long-term financial obligations. Learn more about this type of

Why Operating Working Capital Matters

Operating Working Capital signifies the short-term measurement in which a company's current liabilities are defined during its day-to-day of the company’s day to day operations and is an extremely imp

Working capital turnover: understanding how it works

How can you know if your business is making a healthy profit? By checking its working capital turnover, of course! This is the best way to check your business' success.