BUYER & SELLER ALIGNMENT
I have a feeling that this might be a problem for others as well, so wanted to put it out there to see if any of you had some creative solutions.
The seller wants 100% equity buyout, and also a higher valuation. He's been in the business for 20=30 years, and is an expert in his field, but he's focused on retirement. He's willing to stay on for a year to transition, and he says he's just a phone call away if I ever have questions or advice. Also, there are staff members who are knowledgeable and can do much of the work.
I am willing increase the valuation, but I'd like the seller to carry/rollover 20-25% of the equity so that we're aligned in ensuring future operations. I even offered that he could retain a backbook of receivables, but he didn't want that.
The deal would be at the higher end of what I can handle, though I could pull in additional investors. My main thing would be that even through due diligence, I don't want to be left holding a dud, and having no recourse. (Nothing to date though points to this being a business that would fold overnight).
Am I asking too much, and is it just time to walk away?
Should I decrease my carry requirements?
Would it be better to spread the risk by bringing on additional investors?
Are there other incentives or structures that you'd suggest?