Deal Flow: The measure of the number of potential investments that a fund reviews in any given period.

Deficiency Letter: A letter sent by the SEC to the issuer of a new issue regarding omissions of material fact in the registration statement.

Demand Rights: Contemplate that the company must initiate and pursue the registration of a public offering including, although not necessarily limited to, the shares proffered by the requesting shareholder(s).

Depreciation: An expense recorded to reduce the value of a long-term tangible asset. Since it is a non-cash expense, it increases free cash flow while decreasing the amount of a company's reported earnings.

Derivatives: Financial instruments that "derive" value from related securities or combination of securities. For example an equity option derives its value from the underlying equity volatility. A convertible bond derives its value from the underlying or "related" equity value and the fixed income characteristics of the bond.

Dilution Protection: Mainly applies to convertible securities. Standard provision whereby the conversion ratio is changed accordingly in the case of a stock dividend or extraordinary distribution to avoid dilution of a convertible bondholder's potential equity position. Adjustment usually requires a split or stock dividend in excess of 5% or issuance of stock below book value. Share Purchase Agreements also typically contain anti-dilution provisions to protect investors in the event that a future round of financing occurs at a valuation that is below the valuation of the current round.

Dilution: A reduction in the percentage ownership of a given shareholder in a company caused by the issuance of new shares.

Director: Person elected by shareholders to serve on the board of directors. The directors appoint the president, vice president and all other operating officers, and decide when dividends should be paid (among other matters).

Disbursement: The investments by funds into their portfolio companies.

Disclosure Document: A booklet outlining the risk factors associated with an investment.

Distressed Securities - The securities of companies undergoing corporate restructuring, usually bankruptcy or reorganization. Investors seek to buy company securities at a low price and resell when/if the company comes out of bankruptcy and securities appreciate. Securities can range from low risk senior secured debt to high-risk common stock.

Distribution - The number of gaining or losing rolling periods divided by the total number of rolling periods. Percentages in the "Gain" and "Loss" columns will total 100%.

Distribution: Disbursement of realized cash or stock to a venture capital fund's limited partners upon termination of the fund.

Diversification: The process of spreading investments among various different types of securities and various companies in different fields.

Dividend: The payments designated by the Board of Directors to be distributed pro-rata among the shares outstanding. On preferred shares, it is generally a fixed amount. On common shares, the dividend varies with the fortune of the company and the amount of cash on hand and may be omitted if business is poor or if the Directors determine to withhold earnings to invest in capital expenditures or research and development.

Domestic (Onshore) Fund: An unregistered investment entity that is formed in the U.S. and open to U.S. investors. The General Partner typically acts as investment advisor and manages the fund in return for an advisory and performance fee. The fund is typically structured as a limited liability corporation or a limited partnership.

Down Percent (%): The Down Percentage Ratio is a measure of the number of periods that the investment outperformed the benchmark when the benchmark was down, divided by the number of periods that the benchmark was down. A larger ratio indicates better risk adjusted performance.

Down Round: Issuance of shares at a later date and a lower price than previous investment rounds.

Drag-Along Rights: A majority shareholders' right, obligating shareholders whose shares are bound into the shareholders' agreement to sell their shares into an offer the majority wishes to execute.

Drawdown: a drawdown is the cumulative loss from peek to trough for any given period. A Drawdown is in effect from the time an equity retrenchment begins until ground has been recovered.

Due Diligence: A sequence of actions taken by an investor to ensure the validity of a particular manager or strategy. Usually takes the form of several standard questions and site visits to investigate the quality, reputation, background and adherence to stated manager style and strategy discipline.

Due Diligence: A process undertaken by potential investors -- individuals or institutions -- to analyze and assess the desirability, value, and potential of an investment opportunity.

Duration: A measure of the sensitivity of a bond's price to changes in interest rates.