Commission Regulation (EC) No 800/2008 (repealed)Show full title

Article 28 Definitions

For the purposes of this Section, the following definitions shall apply:

1.

‘equity’ means ownership interest in an undertaking, represented by the shares issued to investors;

2.

‘quasi-equity’ means financial instruments whose return for the holder is predominantly based on the profits or losses of the underlying target undertaking and which are unsecured in the event of default;

3.

‘private equity’ means private — as opposed to public — equity or quasi-equity investment in undertakings not listed on a stock-market, including venture capital;

4.

‘seed capital’ means financing provided to study, assess and develop an initial concept, preceding the start-up phase;

5.

‘start-up capital’ means financing provided to undertakings, which have not sold their product or service commercially and are not yet generating a profit for product development and initial marketing;

6.

‘expansion capital’ means financing provided for the growth and expansion of an undertaking, which may or may not break even or trade profitably, for the purposes of increasing production capacity, market or product development or the provision of additional working capital;

7.

‘exit strategy’ means a strategy for the liquidation of holdings by a venture capital or private equity fund in accordance with a plan to achieve maximum return, including trade sale, write-offs, repayment of preference shares/loans, sale to another venture capitalist, sale to a financial institution and sale by public offering, including Initial Public Offerings;

8.

‘target undertaking’ means an undertaking in which an investor or investment fund is considering investing.