Committed Capital

A formal demand made by a private equity or venture capital fund's general partner requiring limited partners to transfer a portion of their committed capital to fund investments, management fees, or fund expenses. Capital calls are issued as investment opportunities arise rather than collecting all committed capital upfront, and the pace of capital calls relative to distributions is a key measure of fund performance.

The cumulative amount of committed capital that a general partner has drawn down from limited partners through capital calls to fund investments, management fees, and fund expenses. Called capital represents the actual cash invested by LPs and is used to calculate performance metrics including DPI and TVPI.

A form of private equity financing provided to early-stage, high-growth potential companies in exchange for equity. VC firms typically invest across multiple rounds (seed through Series C+), provide strategic guidance, and target returns through exits within 5-10 years.

The value embedded in a company's external relationships with customers, suppliers, partners, regulators, and other stakeholders. Relational capital is a core category of intangible assets that underpins revenue stability, market access, and collaborative innovation capacity.

The ratio of total value returned (realised plus unrealised) to total capital invested. A MOIC of 3.0x means the investment has generated three times the original capital.

The intangible value derived from a company's standing in the market, encompassing trust, credibility, thought leadership, and public perception. Reputation capital influences customer acquisition, talent attraction, partnership opportunities, and the ability to command premium pricing.

Uncommitted or undeployed capital that a fund or investor has available to invest. High levels of dry powder in the market can increase competition for deals and drive up valuations, while individual fund dry powder indicates remaining investment capacity.

The structured sequence in which investment returns are distributed among fund stakeholders, typically flowing from return of capital to limited partners, then preferred return, then a catch-up allocation to the general partner, and finally a profit split based on carried interest terms. The waterfall structure is central to fund economics and LP/GP alignment.

What is working capital and why does it matter in M&A?

Working capital is current assets minus current liabilities; in M&A, buyer and seller agree a normalised target, and under completion accounts the price rises if working capital at completion is above it and falls if it is below.

What special considerations apply to B2B ecommerce and wholesale businesses?

B2B ecommerce differs from B2C: sales cycles are longer, deals are larger, inventory management is critical, and wholesalers expect payment terms and volume discounts.