Glossary
Essential terms and definitions for business exits, acquisitions, and wealth management. Understanding these concepts helps you navigate your exit journey with confidence.
Customer Concentration
The degree to which a business relies on a small number of customers for revenue. High customer concentration increases risk and can lower business valuation.
Learn more →Diligence
The comprehensive investigation and analysis conducted by a buyer before acquiring a business. Includes financial, operational, legal, and commercial diligence.
Earnout
A contingent payment structure where the seller receives additional compensation based on the business achieving specific performance targets after the sale.
Exit Readiness
The state of having your business prepared for a successful sale by addressing operational gaps, reducing owner dependency, and maximizing transferability.
Learn more →Holdback
A portion of the purchase price withheld by the buyer for a period of time to cover potential post-closing adjustments or indemnification claims.
Liquidity Event
A transaction that converts illiquid assets (like business ownership) into liquid assets (cash or marketable securities), typically through a sale or IPO.
Learn more →Owner Dependence
The degree to which a business relies on its owner for operations, relationships, and decision-making. High owner dependence reduces business value and transferability.
Learn more →Quality of Earnings (QoE)
A financial due diligence report that analyzes the sustainability and accuracy of a company's earnings, adjusting for one-time items and accounting irregularities.
Learn more →Transferability
The ability of a business to operate successfully under new ownership without significant disruption to operations, customer relationships, or financial performance.