Below is a glossary of financial terms written by us.
Simply click on a term to access its definition.
[For a correct use of this glossary, please consult these "notes"]

puce EAFE Index

The Europe, Australia, and Far East Index, from Morgan Stanley Capital International, an unmanaged, market-value weighted index designed to measure the overall condition of overseas markets.

puce Early Stage Financing

Financing of a company after completion of its planning stage but before production and market entrance.
See also Seed capital.

puce Earn-out

An arrangement by which the seller of a company may receive additional payments depending on economic performance and business development of the sold company.

puce EASD

[European Association of Securities Dealers]
An association of securities houses, investment banks, venture capital firms, professional advisors and others formed in 1994 to promote the development of securities markets in Europe for growth companies.
The creation of the EASDAQ stock market was one of its first initiatives.
It has over 140 member orgnisations.
Headquartered in Brussels.


[European Association of Securities Dealers Automated Quotation]
was established by EASD is a pan-European stock market for growth and technology companies.
Modelled on NASDAQ in the US, EASDAQ is screen-based (it does not have a trading floor) and quote driven.
The platform was acquired in 2001 by NASDAQ.

puce EBIT

[Earnings Before Interest and Taxes]
Earnings before interest and taxes - A financial measurement often used in valuing a company.


[Earnings Before Interest, Taxes, Depreciation and Amortization]
Earnings before interest, taxes, depreciation and amortization.
An approximate measure of a company's operating cash flow based on data from the company's income statement.
Calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, and amortization.
This earnings measure is of particular interest in cases where companies have large amounts of fixed assets which are subject to heavy depreciation charges (such as manufacturing companies) or in the case where a company has a large amount of acquired intangible assets on its books and is thus subject to large amortization charges (such as a company that has purchased a brand or a company that has recently made a large acquisition).
Since the distortionary accounting and financing effects on company earnings do not factor into EBITDA, it is a good way of comparing companies within and across industries.

puce EDGAR (USA)

[Electronic Data Gathering, Analysis, and Retrieval]
The SEC's computerized system required to be used by subtantially all public companies to file required reports, such as quarterly and annual reports with the SEC.

puce Effective Date (USA)

The date of the SEC order declaring the registration statement for a public offering to be effective, at which time the sale of shares to the public can start.
See also Acceleration Order, Acceleration Request and Going Effective.

puce Emerging Markets

An expression which designates countries which experience a fast development, whose economy and financial markets have however not yet reached western standards.

puce Employee Stock Repurchase Agreement

An arrangement in which a corporation sells stock to its employees but reserves the right to repurchase it under certain conditions.

puce Entrepreneur

As regards venture capital the founder or initiator of a company.

puce Equity

Ownership interest in a company, represented by the shares issued to investors.

puce Equity Arbitrage

puce Equity funds

puce ERISA

[Employee Retirement Income Security Act ]
The Act of 1974 which regulates retirement and employee benefit plans in the USA.

puce ESOP

[Employee Stock Ownership Plan]
A plan established by a company for the allocation of some of its stock to its employees over time.
Its purpose is to motivate employees but it can also provide tax benefits to the company.

puce ESPP

[Employee Stock Purchase Plan]
A plan under which key employees are given the right to purchase shares of the company at a future date on favourable terms.
Under the USA Internal Revenue Code, if a plan meets certain requirements, employees can purchase stock at 85% of market price without any tax consequence.
Rules in other countries may differ.

puce ESRA

[Employee Stock Repurchase Agreement]
An arrangement in which a corporation sells stock to its employees but reserves the right to repurchase it under certain conditions.

puce Euroclear

An international clearing organisation based in Brussels, specialising in securities clearing, settlement and custody services.
Euroclear and Clearstream are the international settlement agencies through which transations on EASDAQ are settled.

puce European Option (or European-style Option)

An option which can only be exercised at maturity.

puce EVCA

[European Private Equity and Venture Capital Association]
An association formed to promote and facilitate European private equity and venture capital.
It has over 500 member organisations from across Europe and North America.

puce Exemption or Exempt from Registration (USA)

An exemption from the statutory requirement to register the offer and sale of a security with the SEC under the Securities Act of 1933.
Exemptions are provided for certain types of securities, such as government issues, pension plans, private placements and certain types of transactions.

puce Exit

Liquidation of holdings by a private equity fund.
Among the various methods of exiting an investment are: trade sale; sale by public offering (including IPO); write-offs; repayment of preference shares/loans; sale to another venture capitalist; sale to a financial institution.

puce Exit (Divestment)

Disposal, i. e. sale or liquidation of an investment by an investor.

puce Exit Routes

Possible exit methods.

puce Exit Strategy

A private equity house or venture capitalist’s plan to end an investment, liquidate holdings and achieve maximum return.

puce Expansion Financing

An investment which occurs during the stage of expansion of a company (extension of production capacity or of distribution channels).
Break even should be reached during this phase.

puce Expected Return

Estimate of the return on an investment which includes price variations and all payments or dividends received.
Calculated on the basis of a distribution curve of all possible payments to be received.
The expected return typically equals the return on a riskless investment plus a risk premium.

puce Expense Allowance

An amount paid to an underwriter to cover the latter for out of pocket expenses incurred in connection with a securities offering, either documented or non-accountable.

puce Exposure