A lot of firms sell an operating model. They bought a Trello board.

Carried interest, explained

Carried interest, usually called "carry", is the share of investment profits that a private equity firm keeps after its investors have been paid back. In a typical PE fund, the Limited Partners (the investors) put up the capital. The General Partner (the PE firm) runs the investments. When

Continuation funds in private equity

A continuation fund is a new private equity fund that a PE firm raises specifically to buy one or more portfolio companies from an older fund it already manages. The old fund gets to exit. The companies move into the new fund. The PE firm keeps managing them for another

EBITDA add-backs, explained

EBITDA add-backs are adjustments a company makes to its reported earnings to produce a higher "adjusted EBITDA" figure. The logic is that certain expenses in reported results are one-time, non-recurring, or non-operational, and so should be added back to arrive at the "real" earnings power of

Buy-and-build and multiple arbitrage

Buy-and-build, also called roll-up, is a private equity strategy where a firm buys a platform company in a fragmented industry and then acquires smaller competitors and adds them to the platform. Over 3-7 years, the combined group gets bigger and, in theory, more valuable per unit of earnings. Multiple arbitrage