Best approach for walking sellers through deal structures that require them to bend?

March 16, 2026

by an investor from Purdue University - Krannert School of Management in Portland, OR, USA

When approaching sellers with requests to carry a meaningful portion of the deal (30%+) as a sellers note with a 2 year offset, I am planning on walking the seller through the high level risks and issues i am struggling with in the deal, then link the terms I am proposing with how sets the stage for a healthy business through the transition and how this protects their legacy. In this case it is a home services business on the smaller side. Any thoughts? Trying to find a solution space that works for me but am now pivoting to how to present in the best light to a seller.

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Reply by an intermediary
from Harvard University in Los Angeles, CA, USA

^redacted‌-thanks for the mention. Easiest scenario to present a 30% carry would be where a lender demands it as a condition of funding. If there is no 3rd party making the request, then you need to make a balanced case on why it makes sense using historical financial results. This is where the quality of your relationship with the seller really matters. If you have developed enough trust, then you have a decent chance of making the case and getting it approved. If not, then this may become a deal breaker.

Reply by a searcher
from Rollins College in Orlando, FL, USA

I'd second @redacted‌. I’d frame it less as asking them to “bend” and more as a function of how the deal actually pencils with a lender. In smaller home services deals senior debt is usually the constraint, not price. If the business only supports ~2–2.5x of bank debt but the valuation implies more total capital than that, the gap has to come from either buyer equity or a seller note. Walking the seller through that tends to land better because it shows the note is what allows you to get to their valuation while still keeping the business conservatively capitalized through the transition. I also try to separate EV from liquidity at close. You’re not cutting price, you’re just aligning when a portion of proceeds gets paid. And if you tie the 2 yr deferral directly to transition risk (employee retention, customer relationships, seasonality, etc.), it feels a lot more logical than arbitrary. The message is basically that this structure is what lets the deal get done at their number without putting the business in a fragile capital structure right after closing.

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