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Private Market Glossary

This glossary provides concise definitions of commonly used terms in the private market.


Your resource hub for all things relevant to the private market.

Alternative Assets

“Alternative assets” (or “alternative investments” or “alts”) refer to several asset classes considered distinct from the “traditional assets” of cash, stocks (i.e., equities), and bonds (i.e., fixed income).

Alternative asset classes include private equity (e.g., venture capital and private equity), private debt, commodities, and rare collectibles. This umbrella term is also used to describe more complex, less regulated investments like hedge funds, managed futures, digital assets/cryptocurrency, and derivatives contracts. Depending on the given investment, real estate may also be considered an alternative asset. Learn More


Bid-ask, often referred to as the bid-ask spread, means the range between the highest price at which an investor is willing to purchase a security (the bid) and the lowest price at which a holder is willing to sell that security (the ask). Learn More


A broker-dealer is an individual or an entity that is engaged in the business of facilitating securities transactions for its own account or for the account of others. Broker-dealers must register with the Securities and Exchange Commission (SEC), and depending on their specific activities may also need to register with “self-regulatory authorities”, such as  the Financial Industry Regulatory Authority (FINRA), or certain exchanges. Broker-dealers may also be subject to state registration. Learn More


A de-SPAC transaction is what occurs when a special purpose acquisition company (SPAC) acquires a private company (though technically it could target a public company too). Essentially, this unwinds the SPAC, and the entity resulting from the acquisition/merger exists as a publicly traded company.

So, as the name somewhat implies, to de-SPAC means to go through a transaction where the public company no longer exists as a SPAC and the company resulting from the acquisition/merger continues trading publicly (as the SPAC did before the transaction). Learn More

Dry Powder

Dry powder in private equity generally means cash or highly liquid securities that private equity or venture capital funds have on hand but have not yet deployed (I.e., invested).

As private equity and venture capital funds receive investments from their fund-investors (usually as limited partners or members in the funds), like pension funds and endowments, they don’t necessarily invest all of those funds immediately. Instead, they might hold some dry powder. Learn More

Indication of Interest (IOI)

An Indication of Interest (IOI) is generally a non-binding indication of an interest by a buyer or seller to purchase or sell a security.

IOIs can be used prior to an initial public offering (IPO) by underwriters to help them determine how to initially price the stock. In a secondary marketplace for private or public shares, an IOI typically means that a buyer or a seller, is interested in entering into a transaction to buy or sell shares at or above a certain price. Learn More

Initial Public Offering (IPO)

An Initial Public Offering (IPO) is a process where a company issues and sells equity to the general public in order to raise capital. When a company goes public, essentially anyone can buy or sell the company’s stock. To go through an IPO in the U.S., a company typically must register the securities it wishes to offer, and the transaction itself, with the Securities and Exchange Commission (SEC), which ultimately leads the company to have ongoing public reporting requirements with the SEC. Learn More

Pre-IPO Company

A pre-IPO company is an entity that has yet to have an initial public offering (IPO). Therefore, a pre-IPO company is a privately owned business. While essentially all private companies could be considered pre-IPO companies, generally this term is reserved for businesses that appear on track for an upcoming IPO, whether in the near term or further into the future. Learn More

Preferred Shares

Preferred shares are shares of a company that typically receive priority for dividends or liquidations before common shareholders and may also carry other rights that holders of the company’s common stock lack. In many cases, preferred shares, also known as preferred stock, have bond-like characteristics, especially at public companies. Still, preferred shares are equity stakes. However, the terms of preferred shares can differ from company to company. Learn More

Primary Funding Round

A primary funding round is when a company raises primary money from investors. A company’s first fundraising round is often a Series Seed, or a Seed round. Seed funding is generally used to finance a startup’s initial costs. Companies then proceed to conduct subsequent funding rounds, such as Series A, Series B, or Series C, in which the startup generally issues stock directly to investors. Money raised in these rounds is typically used to finance a company’s growth. These primary funding rounds stand in contrast to bridge rounds, which are generally smaller, less common funding rounds that take place between standard rounds and often involve the issuance of debt (which may be convertible into equity upon a future round or event) instead of equity. Learn More

Private Company

A private company is generally a business that is privately owned, as opposed to offering some of its equity for sale to the general public (in contrast with a narrower set of investors deemed eligible based on meeting certain regulatory requirements) in a registered offering. A public company has shares that can generally be bought or sold by anyone.  Private companies tend to have more control around stock ownership, and sales of their stock must be conducted pursuant to an exemption from registration with the SEC.

Public companies generally have to disclose more information, such as financial performance, than a private company does based on applicable laws and regulations.

Or, as the SEC explains, a company might not have public reporting requirements but in select cases might trade on smaller public markets. That said, most people in the finance world separate private and public companies based on whether or not company shares can be traded by the general public. Learn More

Private Marketplace

A private marketplace in finance is typically used to describe a platform where buyers and sellers of private securities are able to enter into a transaction for the purchase or sale of these private securities. Private marketplaces can facilitate other types of assets, such as private debt or REITs. A private marketplace may also be used to facilitate the primary issuance of a company’s shares. Learn More

Private Securities

Private securities include all types of securities—such as stocks, bonds, or debt—that are exempt from registration with the SEC. Private securities may be bought and sold between two parties with no intermediary, or through an intermediary like a broker-dealer. But they are not freely available to trade on open markets the way stocks that trade on, for example, the New York Stock Exchange (NYSE). Learn More

Qualified Client

A qualified client 1 is a person that meets certain financial thresholds set by the Securities and Exchange Commission (SEC) that allow investment advisors to charge these clients performance-based compensation (i.e., generally, a percentage of gains realized on investments made for the account of these clients). These thresholds are adjusted periodically by the SEC – the current threshold in effect for individuals since 2021, is a minimum of $1.1 million in assets under management with the investment advisor or at least a net worth of $2.2 million, excluding the client’s primary residence. Learn More

Qualified Institutional Buyer (QIB)

A qualified institutional buyer (QIB) is an entity that meets certain Securities and Exchange Commission (SEC) criteria and is allowed to purchase securities that are not available to other investors or purchase securities with the intention of reselling those securities. Generally, QIB is an entity that owns and invests on a discretionary basis at least $100 million for the entity’s own account or the accounts of other QIBs. Learn More

Qualified Purchaser

A qualified purchaser is an individual or entity that meets certain financial requirements, based on Securities and Exchange Commission (SEC) rules, which enables them to invest in a wider range of vehicles than the average investor. Generally, for an individual to be a qualified purchaser, they need to have at least $5 million in investments ($25 million for entities). Learn More

Right of First Refusal (ROFR)

The Right of First Refusal (ROFR) is a contractual right that gives the ROFR holder priority over others to acquire shares that a shareholder is looking to sell.

In the private market, this can mean that the company or an investor has the right to purchase before others can when a shareholder is looking to sell. Learn More


Private equity secondaries typically refer to private equity transactions where initial investors, i.e., limited partners (LPs), sell their stakes in private equity funds to other investors. Secondaries stand in contrast to the standard lifecycle of a private equity fund, where an investor/LP initially invests into the fund and then, after, say, 10 years, the fund might close/wind down and investors are cashed out. With secondaries, LPs can essentially sell their stakes early. Learn More

Secondary Market

A secondary market is used to describe the trading of shares that have been previously issued and are currently owned by shareholders of the company. This stands in contrast to buying newly issued securities directly from the company in a primary issuance (round). So, a secondary market trade would involve a current shareholder selling their shares to an investor (which can be shares already on the cap table of the company or new shares), compared to a primary investment, which involves the purchase of company shares in a fundraising round where the company issues new shares. Learn More

Special Purpose Vehicle (SPV)

A Special Purpose Vehicle (SPV) is a legal entity created for a specific purpose, typically used to isolate and manage financial risks. SPVs are commonly used in complex financial transactions such as securitization, asset-backed securities, and project finance. The SPV can be a subsidiary of a larger parent company or an independent entity, with its assets, liabilities, and operations typically separate from those of the parent company. The use of an SPV allows investors to invest in specific assets or projects while limiting their exposure to the overall financial health of the parent company. Learn More


A unicorn generally means a private company that has reached at least a $1 billion valuation. These companies get their names based on their relative rarity, as it can be difficult for a startup to grow to that size, especially while remaining private. Learn More

VC-Backed Company

A VC-backed company is a business that is at least partially funded by a venture capital (VC) firm’s investment fund. VC-backed companies are often startups that raise money in exchange for equity from VCs and other private market investors. These companies tend to be in a growth stage. Learn More

Venture Capital

Venture capital generally refers to investments made in startups or other high-growth-potential companies in exchange for equity. Typically, this takes the form of venture capital funds making these investments, often by pooling money from other investors and investing on their behalf.

Venture capital funds might also engage in venture debt, where investors lend money to growing companies, though they also might take a relatively small amount of equity as part of the deal, or the debt may be convertible to equity when certain events occur. Learn More

Volume-Weighted Average Price (VWAP)

A volume-weighted average price (VWAP) is a measure of the average price of an asset based on trading volume over a given period. In public markets, VWAP is used to measure the average price of a stock over the course of a trading day, but it could also be used to measure the average price over any period of time. Investors might use a VWAP indicator to try to inform whether they’re getting a good price. Learn More