Buyout Book : Excerpt

Excerpts  ::   Due Diligence Checklist   ::  Chapter 1

Glossary of Investment Banker Speak

Term or Phrase English Translation
Acquisition strategy The current products have no market
Basically on plan Revenue shortfall of 25 percent
Bio-tech business model Potentially bigger fools have been identified
Considerably ahead of plan Hit plan in one of last three months
Core business Obsolete product line
Currently revising the budget Financial plan is in total chaos
Cyclical industry Posted a huge loss last year
Entrepreneurial CEO Totally uncontrollable, bordering on maniacal
Ingredients are there Given two years, we might find a workable strategy
Investing heavily in R&D Trying desperately to catch the competition
Limited downside It can’t get much worse
Long selling cycle Yet to find a customer who likes the product
Major opportunity Last chance
Niche strategy A small-time player
On a manufacturing learning curve Can’t make the product with positive margins
Possibility of a slight shortfall A revenue shortfall of 50 percent
Repositioning the business Multimillion-dollar investment recently written off
Somewhat below the plan Revenue shortfall of 75 percent
Strategic investor Investor who will pay a preposterous valuation
Too early to tell Results to date have been grim
Turnaround opportunity Lost cause
Unique No more than six competitors
Upgrading the management team The organization is in complete disarray
Volume sensitive Massive fixed costs
Well below plan An outright, unmitigated disaster
Window of opportunity Without more money, the company is dead
Work closely with management Talk to them on the phone once a month