What Is Equity Rollover? How It Works in PE Deals (2026)
How equity rollover works in PE deals: 10-30% rollover, preferred vs common, drag/tag rights, exit ratchets. 76+ buyers, no fees, free calculator, no contract.
How to Value a Business with Rapid Growth
How to Value a Business with Rapid Growth Quick Answer High-growth businesses typically command valuations of 4x to 8x SDE or 6x to 12x EBITDA, significantly higher than slower-growth peers, because buyers pay primarily for future cash flow predictability rather than current earnings. Valuation hinges on three factors: the durability and repeatability of growth, the […]
What Non-Compete Clauses Are Enforceable in Business Deals?
What Non-Compete Clauses Are Enforceable in Business Deals? Quick Answer Non-compete clauses in business deals are enforceable when they protect a legitimate business interest, are reasonable in scope and duration, and are tied to the purchase price or consideration. Courts typically uphold restrictions that limit geographic area and time period to what’s necessary to protect […]
How to Read a Quality of Earnings Report as a Seller
How to Read a Quality of Earnings Report as a Seller Quick Answer A quality of earnings report strips out one-off items and normalizes expenses to show your true sustainable cash flow and earnings power to buyers. As a seller, running this analysis before marketing lets you control the narrative, anticipate buyer questions, and defend […]
Stock Sale vs Asset Sale: Which is Better for Sellers?
Stock Sale vs Asset Sale: Which is Better for Sellers? Quick Answer Stock sales and asset sales offer different tax and liability outcomes for sellers. In a stock sale, the buyer acquires the entire entity including all contracts and liabilities, which can expose you to ongoing risk but often provides simpler tax treatment on capital […]
Purchase Price Allocation: How It Affects Your Taxes
Purchase Price Allocation: How It Affects Your Taxes Quick Answer Purchase price allocation divides the total sale price into separate asset values, which determines tax basis, depreciation schedules, and reported gains or losses for both buyer and seller. The buyer uses the allocation to plan future tax deductions through depreciation and amortization, while the seller […]
Transition Service Agreements: Key Considerations for Sellers
Transition Service Agreements: Key Considerations for Sellers Quick Answer A transition service agreement is a post-closing contract where the seller temporarily provides operational support, such as ERP data conversion, payroll processing, or accounting services, to help the buyer operate the acquired business independently. Sellers should define scope precisely, limit duration to the shortest practical period, […]
Understanding Holdbacks in Business Acquisitions
Understanding Holdbacks in Business Acquisitions Quick Answer A holdback is a portion of the purchase price, typically 5% to 15%, placed in escrow after closing to protect the buyer from undisclosed liabilities, incomplete financial records, or covenant breaches that surface during the transition period. The held funds are released to the seller after an agreed […]
What Stays and What Goes in Working Capital for Business Sales
What Stays and What Goes in Working Capital for Business Sales Quick Answer Working capital in a business sale includes current assets like cash, accounts receivable, and inventory that transfer at closing, while the seller typically retains reserve funds and personal assets unrelated to operations. The purchase agreement should define a net working capital target […]