An accredited investor is an individual or business entity that's allowed to trade securities that may not be registered with financial authorities by satisfying at least one requirement regarding their income, net worth, asset size, governance status, or professional experience.

A requirement of ESOP plans, this formula is proportionate to each participant's compensation, per capita, and points allocation based on compensation and service. Compensation needs to be defined for allocation purposes.

A quality of earnings report is a routine step in the due diligence process for private acquisitions. The report assesses how a company accumulates its revenues – such as cash or non-cash, recurring or nonrecurring.

Cooperatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

SBA’s primary business loan program, provides loan guaranties to lenders that allow them to provide financial help for small businesses. The maximum loan amount is $5MM. Key eligibility factors are based on the business's good or service, credit history, and location.

The combining of two EO Plans, such as what happens when an ESOP purchases another ESOP.

A "captive insurer" is generally defined as an insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting profits.

Typically references to companies with less than $250 million in enterprise value

A Limited Liability Company (LLC), is a company managed by members or elected managers, like a partnership, but with the financial and legal responsibility of the members limited to the amount of capital they have invested in the business.

A US Government department whose mission is to uphold the rule of law, to keep the country safe, and to protect civil rights.

A business that issues surety bonds for financial guarantees. If the bonded party fails to perform, the bonding company will cover the costs, acting as a safety net for the person hiring the bonded party.

A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.

In a frozen ESOP plan, further contributions stop, but the plan continues to operate. Employees receive their distributions according to the rules of the plan document. Theoretically, the plan could continue until the last participant receives a distribution.

Any structural limitations inherent to being an EO company, e.g., an ESOP cannot pay more than fair market value when the company's stock is sold

A prospectus is a formal document required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. A prospectus is filed for offerings of stocks, bonds, and mutual funds.

the Main Street Employee Ownership Act, which Congress enacted in section 862 of Public Law 115-232, requires SBA to make structural changes in SBA lending programs to ease the challenges faced by employee-owned businesses in accessing financing. This legislation also requires SBA to use Small Business Development Centers (SBDCs) to establish an employee-owned business promotion program to provide assistance on structure, business succession, and planning

An interest rate swap is a financial contract where one party exchanges future interest payments with another based on a specified principal amount. These involve switching between fixed and floating interest rates to hedge against rate fluctuations or secure favorable terms.

Surety is a type of financial guarantee.

Convertible preferred stock carries the characteristics of common stock and debt. It provides a stated reasonable dividend and converts to common stock at a specified time.

In accounting, goodwill is an intangible asset. The concept of goodwill comes into play when a company looking to acquire another company is willing to pay a price premium over the fair market value of the company’s net assets.

A Search Fund is an investment pool aspiring entrepreneurs use to raise capital from HWNI's in order to acquire a business (valued between $5 and $30MM) and step in as CEO and operate the company.

Industrial revenue bonds (IRB) are municipal debt securities issued by a government agency on behalf of a private sector company and intended to build or acquire factories or other heavy equipment and tools.

A micro acquisition involves a larger company purchasing a smaller firm, typically characterized by its smaller scale compared to traditional M&A. These acquisitions are driven by various synergistic motives such as acquiring talent, gaining access to new technologies, etc.

First-loss capital or First-loss reserve is money invested with the highest risk of loss in a deal. It acts like a buffer, absorbing losses before impacting other investors.

Employee stock purchase plans (ESPPs) enable employees to buy company stock at a discounted rate, such as 15 percent. The plans offer a potential financial benefit to employees, encourage them to stay with the company for a certain period of time (otherwise they lose the benefit), and can promote employee loyalty to the business.

The right of redemption allows homeowners who have defaulted on their mortgages to reclaim their property by paying the overdue amount, including interest and penalties, either before or sometimes after a foreclosure sale.

Any unique EO company considerations in the appraising of company value, e.g., ensuring rigor that would satisfy regulators in an ESOP appraisal

A consumer-owned co-op, typically a retail grocery store brick and mortar operation.

410(b) coverage testing is a type of compliance test certain qualified retirement plans (e.g., ESOPs) must undergo each year to ensure their plan doesn’t overly favor highly compensated employees (HCEs) over non-highly compensated employees (NHCEs) when it comes to who is eligible to participate in the plan.

A sub-plan created as part of the overarching succession plan which specifically defines things like key stakeholders to be notified of the succession plan, and sample copy and/or graphics for how the succession plan will be communicated.