By Brian M. Smith, Co-founder and Managing Partner
When selling a business, structure often matters as much as price. Choosing between an all-cash transaction and rollover equity can significantly impact both your immediate liquidity and long-term wealth. At LCG, we help business owners evaluate these options and tailor deal structures that best fit their financial objectives and risk appetite.
What Is an All-Cash Sale?
An all-cash transaction offers immediate liquidity and a clean exit. It’s often the preferred choice for business owners looking to retire or diversify investments. However, taking all cash means forgoing potential upside if the company grows rapidly under new ownership.
What Is Rollover Equity?
Rollover equity allows a seller to reinvest a portion of the sale proceeds, typically 10% to 40%, into the acquiring entity. This structure keeps the seller “at the table” for the company’s next growth phase, aligning interests with the buyer and offering the potential for a “second bite at the apple.”
Which Option Is Right for You?
The answer depends on your personal goals, risk tolerance, and belief in the buyer’s growth strategy. Some owners prefer the certainty of cash; others see value in staying partially invested alongside a strategic or private equity partner.
How LCG Helps Clients Evaluate Deal Structure
We guide clients through scenario analysis to weigh liquidity needs, tax implications, and long-term equity value potential. Our goal is to help business owners achieve balance by capturing immediate value while remaining involved in future growth.