Open Standard Education
The Mechanics of
Equity Capital.
We decode private equity structures, public market valuations, and the mathematical reality behind cap tables and LBOs. No investment advice. Just the mechanics.
Finance is obscured by jargon. The math is simple.
Most resources on private equity and institutional finance treat the underlying mechanics as proprietary secrets. They bury the basic arithmetic of Leveraged Buyouts (LBOs) and Discounted Cash Flows (DCFs) behind complex excel wizardry and proprietary training courses.
The Institute of Equity exists to publish the exact formulas, structural norms, and market realities that govern how companies are valued, bought, and sold.
Whether you are a founder navigating a Series A term sheet, a junior analyst building your first operating model, or an allocator trying to understand Internal Rate of Return (IRR) versus Multiple on Invested Capital (MOIC), you will find the answers here, documented in plain English.
Core Domains
Private Equity
The mechanics of LBOs, fund structures (GP/LP), carry waterfalls, and value creation in privately held assets.
Venture & Growth
Cap table math, dilution, liquidation preferences, term sheets, and the economics of high-growth equity.
Valuation
DCF analysis, WACC calculation, public market comparables, precedent transactions, and enterprise value bridges.
IRR vs MOIC:
The Math of Returns
Internal Rate of Return (IRR) measures the time value of money, while Multiple on Invested Capital (MOIC) measures absolute cash returned. Private equity relies on both. See exactly how hold duration impacts IRR while leaving MOIC unchanged.
Open CalculatorRecent Institutional Briefings
Deep dives into the technical mechanics of corporate finance. Cited, sourced, and mathematically rigorous.
The Paper LBO: A Complete Breakdown
How to build a simple Leveraged Buyout model in 5 minutes without Excel. Understanding the core drivers: EBITDA growth, debt paydown, and multiple expansion.
Why Terminal Value Dictates DCFs
In most Discounted Cash Flow models, 70%+ of the present value sits in the terminal value. We break down the Gordon Growth Model vs. Exit Multiple approaches and common errors.
Participating vs. Non-Participating Preferred
The math behind downside protection in Venture Capital. How a 1x non-participating liquidation preference impacts founder payouts at exit.
Market Baselines
Current typical parameters used in baseline modeling. Do not use for live transactions.
Calculator Library
View all →DCF Model
Discounted Cash Flow calculator with WACC and terminal value inputs.
IRR / MOIC
Convert between Internal Rate of Return and Multiple on Invested Capital.
Cap Table Math
Simulate dilution across Pre-Seed, Seed, and Series A rounds.
Paper LBO
Quickly assess buyout viability with debt paydown assumptions.