This list is great and highlights more unique instruments, like phantom, that do not get as much coverage as earnouts, rolled equity and seller notes (likely due to tax implications for the recipient of phantom payouts). ^redacted‌ would love to hear your thoughts on the benefits and drawbacks of using warrants to accomplish a similar goal to rolled equity.

^redacted‌ Absolutely. Warrants are less popular in the lower middle market as they can feel more esoteric to sellers. They do offer flexibility and incentive alignment in transactions by providing an option for the seller to purchase equity in the future. However, we see this involved in more limited scenarios such as when a seller doesn't want to miss out on the upside potential of the business. It's not used to bridge a purchase price gap as earnouts may be used, and most people use the other options mentioned above for incentive alignment as they are more tangible and common. It can certainly align incentives and potentially help with tax planning if it's of interest to the seller. Feel free to DM me or schedule a consultation if you'd like to discuss this or other deal terms further.