Business & Finance Glossary: V
14 terms starting with V, from a glossary of 656 definitions covering intangible assets, valuations, and key financial concepts.
Valuation Multiple
A ratio used to estimate the value of a company by comparing its market value or enterprise value to a financial metric such as revenue, EBITDA, or earnings. Higher multiples typically reflect stronger growth prospects, margin quality, and intangible asset positions.
Read more →Value Bridge
A visual and analytical framework that reconciles the difference between two valuations — typically entry and exit, or book value and market value — by attributing value changes to specific drivers such as revenue growth, margin improvement, multiple expansion, and intangible asset creation. Value bridges are widely used in private equity reporting and portfolio company management.
Read more →Value Creation Plan
A structured strategy developed by private equity firms or management teams to systematically increase the value of a business over a defined holding period. Value creation plans typically address revenue growth, margin improvement, operational efficiency, and intangible asset development.
Read more →Value Driver Tree
A hierarchical diagram that breaks down a company's enterprise value into its component financial and operational drivers, mapping how inputs such as customer acquisition, pricing, retention, and productivity combine to produce revenue, profit, and cash flow. Value driver trees are essential for identifying where intangible asset investments create the greatest impact.
Read more →Value Drivers Register
The formal, auditable record of the intangible assets a business owns, with each asset individually named, described and classified against the Opagio 12 intangible value drivers. It is the output of Guided Asset Discovery, the first step of The Opagio Method, and it exists because the accounting standards leave most intangible value undocumented: IAS 38 and FRS 102 Section 18 prohibit recognising internally generated intangibles on the balance sheet, so brand, software, customer relationships, data and know-how built in-house appear nowhere in the filed accounts. The Register closes that documentation gap. Every entry carries the evidence that supports it, so the record can be examined by a valuer, a lender's credit team, an acquirer's diligence team or an auditor rather than taken on trust — the audit trail, not the assertion, is what gives the Register its standing. Once assets are on the Register they can be valued using recognised methods such as relief from royalty, multi-period excess earnings, with-and-without and cost, presented in a funding or lending conversation, and tracked over time as investment continues. Opagio's implementation is the Opagio Value Drivers Register™, which supersedes the earlier informal labels asset registry, growth asset register and intangible asset register.
Read more →Value in Use
The present value of the future cash flows expected to be derived from an asset or cash generating unit, calculated using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Under IAS 36, value in use is one of two measures (alongside fair value less costs of disposal) used to determine recoverable amount for impairment testing. Cash flow projections must be based on reasonable and supportable assumptions and should not exceed five years unless a longer period can be justified.
Read more →Vendor Due Diligence (VDD)
A comprehensive due diligence exercise commissioned and paid for by the seller of a business prior to a sale process, with the resulting reports made available to prospective buyers. VDD typically covers financial, tax, commercial, and legal matters and is prepared by independent professional advisors. It accelerates the sale process, reduces the number of buyer due diligence queries, provides the seller with greater control over the information flow, and can support a higher valuation by pre-addressing potential buyer concerns.
Read more →Vendor Loan Note
A vendor loan note (also called vendor finance or a deferred loan note) is an arrangement in which the seller of a business lends part of the purchase price back to the buyer, to be repaid over time with interest. Instead of receiving the whole price in cash at completion, the seller takes a loan note for a portion of it, which the buyer pays down from the acquired business's cash flow. Vendor loan notes help bridge a gap between the price a seller wants and the cash a buyer can raise, and they signal the seller's confidence in the business. For the buyer they reduce the upfront funding required and align the seller with a smooth handover; for the seller they carry credit risk, since repayment depends on the buyer's continued solvency, which is why reverse due diligence and appropriate security matter. Vendor loan notes are common in UK owner-managed business sales and management buyouts.
Read more →Venture Capital (VC)
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.
Read more →Venture Debt
A form of debt financing available to venture-backed startups that supplements equity financing without requiring the dilution of additional equity rounds. Venture debt is typically structured as term loans with warrants giving the lender the right to purchase equity, and is used to extend runway, finance equipment, or bridge between funding rounds. Providers include specialist venture lenders and the venture-banking arms of some banks.
Read more →Vesting
The process by which an employee or founder earns full ownership of equity over time, typically over a 3-4 year schedule. Vesting aligns long-term incentives with commitment and usually includes a cliff period (often 12 months) before any equity vests. Vesting schedules are particularly important in intangible-rich companies, where key personnel hold significant knowledge, customer relationships, and technical expertise that are critical to the organisation's competitive position.
Read more →Vintage Diversification
An investment strategy that spreads private equity or venture capital commitments across multiple fund vintage years to reduce the impact of any single economic cycle on portfolio performance. Vintage diversification is a core principle of institutional portfolio construction and helps smooth the J-curve effect inherent in illiquid fund investments.
Read more →Vintage Year
The year in which a private equity or venture capital fund makes its first investment or first capital call, used to classify and compare fund performance across different economic and market cycles. Vintage year analysis is essential for benchmarking because funds launched in different years face different entry valuations, exit environments, and macroeconomic conditions. Industry benchmarks from organisations such as Cambridge Associates and Preqin are organised by vintage year.
Read more →VPGA 6
VPGA 6 is the RICS Red Book Valuation Practice Guidance Application on the valuation of intangible assets. It sits within the RICS Valuation - Global Standards (Red Book) and applies the International Valuation Standards, principally IVS 210, so that vpga 6 intangible assets work is delivered to a consistent, auditable standard rather than an informal estimate. The passage lenders care about most is not in VPGA 6. It is Appendix A, "Valuations supporting IP debt financing", of the separate RICS standard "Valuation of intellectual property rights" (2020). That appendix says that where the IP is used as collateral the debt provider may wish the valuer to consider a liquidation premise, that for an asset-backed financing decision it may be appropriate to value on current use and also on orderly liquidation, and that for early-stage technology and data IP the valuer should ensure a 'most likely' value range does not obscure outcomes in which the IP could not service the debt. In practice the report should present value ranges and sensitivity analysis, and valuers preparing for lending often use cautious inputs - a low-end royalty rate, a risk-weighted discount rate, a finite economic life rather than a perpetuity, and cautious or absent terminal value. For a lender, a valuation prepared with these points in mind is easier to rely on as security than a headline figure. For a borrower, it disciplines expectations: the figure supporting a facility is not the same as a headline going-concern valuation. A worked UK example is NatWest's High Growth IP Loan, which lends from £250,000 at up to 50% of the independently assessed IP value. Accountants and corporate-finance advisers preparing a client for IP-backed borrowing should check what the lender requires and instruct the valuer on the standards and premise of value that lender needs, so the report is fit for a credit committee, not merely for management accounts.
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