GLOSSARY
Asset value
Total gross assets (including derivates, cash, debt securities, and other financial and non-financial assets).
Authorised deposit-taking institution
An authorised deposit-taking institution, e.g. a bank, credit union, etc.
Commitments
Capital pledged by investors, representing the maximum amount that the fund (vehicle) may drawdown from investors.
Cost/Book
Assets may be valued by the cost of the asset at time of purchase by the fund (vehicle). This is the preferred method, at least for the first 12 months.
Deals
The investment made by a VC&LSPE fund (vehicle) into an investee company. Typically an investee company will be the subject of a single deal from a single fund. However it is possible for an investee company to receive investment from multiple VC&LSPE funds (vehicles) and therefore be the subject of multiple deals.
Debt securities
Borrowings which may be traded on secondary markets. Short term debt securities include bills of exchange, commercial paper and promissory notes. They generally have an original term to maturity of 30 to 180 days. Long term debt securities have an original term maturity of more than one year, and include bonds, debentures, convertible notes, and non-participating preference shares. They do not include derivatives.
Directors' valuation
Assets may be valued by the directors taking care to undertake valuations with integrity and based on a common sense approach. This will need to be logically cohesive and subject to a rigorous review procedure under the direction of senior management and possibly non-executive directors.
Drawdowns from investors
Capital committed by investors that is actually transferred to a fund (vehicle) in aggregate for the life of the fund. Also known as cumulative called or paid-up capital.
Early expansion
An investee company which is operational and has product in the market place. The investee company will show significant revenue growth, and may or may not be profitable.
Follow-on investment
A subsequent investment made by a VC&LSPE fund (vehicle) that made a previous investment in the company; generally equal to a later stage investment in comparison to the initial investment.
Fund
See Vehicle.
Fund of funds
This type of fund pools investments from a diverse range of investors and mainly places its investments with other VC&LSPE funds (vehicles) that then invest in investee companies. Direct investments may occur, but are typically undertaken as a co-investment with another fund manager who manages the investment.
Governments in Australia
Comprises all government units of the Australian government, each state and territory government, and all local government authorities.
Independent valuation
Assets may be valued by a registered independent valuer who will then value the asset based on the current market movements and environment.
Initial Public Offering
Initial Public Offering (IPO) is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time.
Investee company
The company in which the venture capital or later stage private equity investment has been made.
Late Expansion
Current product improvement or new product development. Continued revenue growth. Approaching, or at, profitable operating levels.
Later Stage Private Equity
An investment in companies in the late stage of expansion, turnaround and buy-out or sale stage of investment. The risks are high and investors have a divestment strategy with the intended return on investment mainly in the form of capital gains (rather than long-term investment involving regular income streams).
LBO/IPO/Listing
Leveraged buy-out/in (LBO/LBI) involves the acquisition of a product or business from either a public or private company often utilising a significant amount of debt and little or no equity. IPO/Listing is investment in a business with the intention of listing it on the stock exchange, eventually offering shares to the public.
Life insurance offices
Life insurance offices must be registered with the Australian Prudential Regulation Authority (APRA). Life insurance offices offer insurance for death or disability and also offer investment and superannuation products. Generally, they have the word “life” in their legal name. They include friendly societies, but exclude insurance companies offering house, car and marine insurance.
Listed shares and units
Shares in resident companies and units in resident trusts quoted on the Australian Stock Exchange (ASX). Does not include equity derivatives or shares in foreign companies.
New investment
New investment made by a VC&LSPE fund (vehicle) in a new investee company.
Non-residents
Any individual, business or other organisation domiciled overseas. Foreign branches and foreign subsidiaries of Australian businesses are regarded as non-residents.
Paid-in Capital
See Drawdowns from investors.
Pension funds
Provide benefits for their members on retirement, resignation, death or disablement. A superannuation fund usually takes the legal form of a trust fund. Includes pooled superannuation trusts (PST), approved deposit funds (ADF) and public sector superannuation funds.
Pre-seed
An investee company in the process of setting up. Product is in research and development stage.
Residents
Any individual, business or other organisation domiciled in Australia. Australian branches and Australian subsidiaries of foreign businesses are regarded as Australian residents.
Seed
An investee company in the process of setting up. Product at testing or pilot production stage.
Start-up
The investee company is not yet fully operational. May or may not be generating revenue.
Total assets
See Asset value.
Trading enterprises
Those businesses which are owned and controlled by all levels of governments and which produce goods or non-financial services for sale at market prices.
Trust funds
Public unit trusts issue units to the general public within Australia and invest the pooled monies. They must have registered a prospectus with the Australian Securities and Investment Commission (ASIC). Some are listed on the Australian Stock Exchange (ASX). There are two broad types of public unit trusts: property and trading trusts; and financial trusts such as mortgage, fixed interest and equity trusts.
Turnaround
Financing provided to a company at a time of operational or financial difficulty with the intention of improving the company's performance. The company may not be profitable, its product turnover stagnant and/or with flat or declining revenue.
Unlisted equity
Equity in resident unlisted trusts and resident unlisted participating preference shares.
Unrealised gains/losses
The change in the market value of any equity that will only be realised on the sale of the equity.
Unused commitment
The unutilised portion of capital pledged by investors, which is yet to be received. Unused commitment is the difference between commitments by investors and drawdowns from investors.
Value of Investment
The balance sheet value of investment in investee companies at the start or end of a financial year.
Vehicle (fund)
Funds or pooled funds (where capital is sourced from the fund manager and investors) for investment in investee companies and are mainly organised in the form of either trust funds or corporations.
Venture Capital
High risk private equity capital for typically new, innovative or fast growing unlisted companies in the pre-seed, seed, start-up or early expansion stage. A venture capital investment is usually a short to medium-term investment with a divestment strategy with the intended return on investment mainly in the form of capital gains (rather than long-term investment involving regular income streams).
Write-offs
Writing down of a portfolio company's holdings to a valuation of zero, with the fund receiving no proceeds from their investments.
Quality Declaration 
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