News & Resources
When business owners think about the value of their company, the conversation often starts with a simple calculation: "What multiple would I get on my EBITDA?". It's a reasonable place to start. But it is not where the analysis ends. In today's M&A market, two businesses generating the same EBITDA can command dramatically different valuations.
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Most owners know their businesses exceptionally well. They understand their customers, employees, operations and competitive landscape. But when it comes time to sell, many discover that knowing the business is not the same as explaining why a buyer should pay a premium for it.
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For many companies, acquisitions are one of the most effective ways to accelerate growth, expand capabilities, enter new markets, or deepen competitive advantage.
Earnouts and reverse earnouts are commonly used in M&A transactions to bridge valuation gaps, allocate risk, and align incentives where future performance is uncertain.
I have seen many LinkedIn posts and blogs highlighting the importance of not only building a sustainable and transferable business, but one that is more valuable. While most business owners understand the practical fundamentals—building a competent management team so the business is not dependent on its owners, keeping clean financials to withstand due diligence, and documenting processes—many overlook something equally important: Your narrative.
In this article, we unpack the when, why, and why not of rolled equity from the seller’s point of view—drawing on practical insights and multiple client discussions on rollover structures.
