Business & Finance Glossary: V
11 terms starting with V, from a glossary of 559 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 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 →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 lenders such as Silicon Valley Bank and Kreos Capital.
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.
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