Has anyone offered business owner a management position post acquisition?

searcher profile

October 31, 2023

by a searcher in Seattle, WA, USA

I’m early in my search so some of these lessons might be obvious to acquisition veterans. Are there any lessons or gotchas to be aware of when considering offering the owner/seller a management position to help run the business post acquisition?

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commentor profile
Reply by a professional
from The University of Tampa in Tampa, FL, USA
Yes, this is fairly common practice. I've seen all different scenarios where the owner doesn't stay on at all, stays on for a limited time frame to help the new owner/operator transition, or signs an employment agreement and stays on long-term as the investor does not have an interest in operating the company on a daily basis. There are obviously other scenarios, but these are the three most common I see.
commentor profile
Reply by an intermediary
from University of Toronto in Toronto, ON, Canada
Depends on owner's goal. Even for retirement situations, some owners are willing to stay on as management/advisor for one year or longer post-transaction to train the new owner operator. Generally speaking, we have seen most buyers being keen to keep the business owner in the business for a period of time post-closing.
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