When you sell your company, you might not have to sell all of it. In many sales, especially those involving private equity buyers, the buyer may ask you to “roll over” some of your ownership into the new company. That’s called rollover equity. It means you take part of your sale price in the form of ownership in the buyer’s new company instead of cash. You still get a big payout, but you keep a piece of the business and stay invested for the next chapter. Why Buyers Propose R

When it comes to structuring a business sale, every business owner wants to be paid in full at closing and every buyer wants to limit risk and conserve cash. The tension between those conflicting goals is often resolved through an earnout.   Earnouts are most common in life science and technology industries, due to inherent uncertainties around regulatory approvals, clinical trials and high growth potential. In manufacturing and services industries, earnouts can usually be av

Business sellers need to understand that buyers expect a normalized level of working capital to be included in the sale. Negotiating working capital targets and formulas are an important part of any sale process because the final purchase price will be adjusted up or down depending on the working capital actually delivered at closing.