Seller willing to transition out over 3-5 years

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August 24, 2022

by a searcher from University of Pennsylvania - The Wharton School in Oakville, ON, Canada

This is a classic case of seller willing to retire. I was wondering if there are any ideas/suggestions on deal structuring when owners are willing to transition out over 3-5 years. In the interim they are willing to stay and help run the business and hire replacements. Given this backdrop, any best practice(s) suggestions in deal structuring would be welcome.

For starters, how much seller financing/forgivable debt would be ideal/reasonably accepted for such a transition period?
What are the specific non-compete and liability considerations in such transactions to avoid any unforeseen exposure?
Any other considerations to be mindful of?

Thank you and best regards,
Abhishek

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Reply by a professional
from University of California, Berkeley in Sacramento, CA, USA
if the seller is already want to leave.. then don't as them to stay for more than 1 year. They'll be more of a burden than asset.
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Reply by a searcher
from Cornell University in Los Angeles, CA, USA
Also need to be careful about length of transition if you're using SBA funding
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+1 more reply.
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