What Does J-Curve Mean?
A j-curve is a financial term generally used in many financial applications to illustrate initial negative returns followed by increasing positive returns after a period of time.
In the context of selling a business to financial buyers, sellers should understand that private equity firms usually expect a j-curve in their investments. This is because the initial years will show negative returns in their funds as capital is being deployed, and then from approximately year five and afterwards the returns turn positive as the investments flow cash back and are ultimately sold.