Profit after tax divided by the number of ordinary shares in issue.

A provision sometimes written into the terms of a transaction that states the vendors will receive further payments if the business they have sold achieves specified performance levels.

The European Association of Securities Dealers Automated Quotation. This was set up in order to establish and operate a pan-European regulated stock market, targeted specifically towards young and fast-growing companies with international aspirations. See NASDAQ.

A new or young business with the potential to grow into a substantial business.

A word to describe an enterprising businessman or woman. Normally an owner of an independent business.

The ratio between the price paid by management and that paid by the investing institution for their share of the equity in an MBO or MBI.

Equity investors share ownership of an enterprise. Consequently, they share both the rewards, if the business prospers, and the risk of losing their investment if things go wrong.

European Venture Capital Association. Association of providers of venture capital and investment capital across Europe.

The opportunity for investors to realise (i.e. sell) their investment. Normally, the exit from investment in a private company occurs either through a trade sale of the company or through its flotation on the stock market. A good exit benefits both the individuals who launched the business and outside investors who back them. (Some of these outside investors look for a quick exit, some take a longer view.) See Short-termism.