I was wondering why it is so. why is it that buyers cash equity is based on the total purchase price/TEV (cash + deferred consideration)? why then is sellers equity not considered cash equity on grounds that it is deferred and reduces cash purchase price? why then buyers equity must not be based on actual cash at closing (aka TEV minus deferred consideration which does not hit balance sheet during life of bank debts)? Any bankers or bank brokers have any answers, help guide me? It is very easy to say buyer needs skin in the game but to what % and how is it defined, I get confused what if there was no seller equity, and the buyer had to raise that same amount from external LPs. You will be shocked to know most bankers did not read the actually written banking laws. I will leave it at that!