Leveraged Buyout (LBO): How Private Equity Actually Buys Companies
An LBO uses equity + significant debt to acquire a company. Here's the capital structure, return drivers, and why LBO math defines PE returns.
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An LBO uses equity + significant debt to acquire a company. Here's the capital structure, return drivers, and why LBO math defines PE returns.
Liquidation preference is the single most important term on a VC term sheet. Here's how 1x non-participating, participating, and multi-preferences change exit payouts.
The 2-and-20 fee structure defines how VCs and PE GPs get paid — ~2% management fee plus ~20% carry. Here's how fees, hurdles, and waterfalls actually work, with dollar examples.
Your pitch deck should tell a clear, defensible story in 10–12 slides. Here's what each slide must say — and the mistakes that kill meetings.
Pre-money + investment = post-money. It sounds simple, but option pool shuffle, fully diluted share counts, and SAFEs can destroy 5–10% of founder ownership in minutes.
Pro-rata rights let investors maintain ownership by participating in future rounds. Here's how pro-rata mechanics, super pro-rata, and fund reserves actually work.