SELLER CONCERN WITH DEBT STRUCTURE + WANTS EARN-OUT TO BE 'GUARANTEED'
Hey all -
I have been working on a deal for the last 6 months, and we’re at the altar. All the money is raised, legal docs spun up, boxes all checked. My seller has chosen this moment (par for the course, perhaps) to bring up doubts on the funding model (debt + equity + earnout to buy the business). Long story short, he’s never operated a company with debt, and is concerned that in a downturn we’d lose the whole thing. Furthermore, he is seeking guarantees on the earn-out portion of his deal.
Does anyone have examples or structures they have used to help a seller feel more like we’re on the same page? In this deal, I’m keeping him for 3-5 years, so it would not be successful to antagonize him.