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You have a buyer. Now structure the deal to maximize after-tax proceeds and protect yourself post-sale.
15-25%
Asset vs Stock Sale
Tax difference on same price
30-50%
Earnout Risk
Of earnouts never fully paid
60-120 days
Typical Closing Time
After LOI signed
How You Get Paid
| Feature | Seller Preference | Buyer Preference |
|---|---|---|
| All Cash at Close | Best — certainty, no risk | Worst — all risk on buyer |
| Cash + Seller Note | Good — higher total price | Better — spreads payments |
| Cash + Earnout | Risky — contingent on performance | Best — pays only if business delivers |
| Stock/Equity Swap | High risk — illiquid | Great — preserves cash |
| Asset Sale | Higher tax (ordinary income portion) | Preferred — step-up in basis |
| Stock Sale | Lower tax (capital gains) | Less preferred — inherits liabilities |
Letter of Intent (LOI)
Non-binding price and terms. Triggers exclusivity period.
Due Diligence
Buyer examines everything: financials, contracts, employees, liabilities, IP.
Purchase Agreement
Attorneys negotiate final terms, reps & warranties, indemnification.
Closing
Sign documents, wire funds, transfer ownership. You're done.
Transition Period
Usually 3-12 months consulting. Introduce key relationships.
Negotiate Stock Sale (Not Asset)
Capital gains rate (20%) vs. ordinary income (37%). Huge difference on $1M+ sales.
Installment Sale Structure
Spread gain over 3-5 years. Stay in lower brackets. Interest income trade-off.
QSBS Exclusion Check
If C-Corp held 5+ years, exclude up to $10M gain. Verify eligibility with CPA.
Opportunity Zone Reinvestment
Reinvest capital gains within 180 days. Defer (and potentially reduce) tax.
Charitable Strategy
Donate appreciated shares before sale to avoid gains on that portion.
Non-Compete Allocation
Key Takeaways