Industry Terms & Descriptions
by Martin Hansen
Buyer: a person or entity who has purchased, or is considering purchasing, a business/company
Seller: a person or entity who has sold, or is considering selling, a business
Deal or transaction: a process by which two or more parties, for their mutual benefit, have completed or are contemplating completing the sale or purchase of a business.
Mergers & Acquisitions (M&A): a general term that refers to the consolidation of companies or assets through various types of financial transactions.
Strategic Buyer: a type of buyer who is in the same industry/business, and is therefore in a position to rapidly integrate the acquired business after the completion of the transaction.
Financial Buyer: a type of buyer in an acquisition that is primarily interested in the return that can be achieved from a purchase.
Business Broker: a professional that assists buyers and sellers of privately-held businesses in the buying and selling process.
M&A Specialist: a professional that facilitates the purchase, sale, or merger of businesses. A M&A Specialist’s responsibilities will vary greatly depending on the type of transaction.
Investment Banker: an individual, often an employee of a financial institution, who primarily focuses on raising capital or providing M&A strategy for corporate clients.
Business Advisor (CPA, Business Consultant, Exit/Financial Planner): an individual who works with clients on strategy, planning, problem solving, and exiting the business.
Private Equity: a funding source composed of funds and investors that primarily invest in private businesses with the goal to grow, hold, and sell within 3-7 years.
Executive Summary: a summation that explains the main features of a business in a way that will make the reader want to learn more, or recaps the contents of a preceding document in such a way that the reader is left with clear understanding of the business.
Business Profile: a one-page document that gives the reader the basic information on the business in bullet-point form.
Blind Profile: Same as the business profile, except it does not disclose the name or identity of the business.