What happens to seller equity roll?

by a searcher from Boston College

3 years ago

The seller wants to retain 45% of equity post-close.

As we finalize deal terms, we are discussing whether their seller equity will be diluted by sponsor promote and mgmt options.

Understand every deal is different...but is it typical or atypical to dilute the sellers' rolled equity with sponsor promote and mgmt options?  

2 likes
191 views
2 comments

searcher from Massachusetts Institute of Technology - MIT Sloan School of Management

Dilution would be normal given the promote and mgt options pool. Keeping it fair and transparent is usually the best way to go and avoids issues down the road

3 years ago | like reply | 0 likes

investor from University of Western Ontario

Everyone takes dilution. No other way to do it fairly - otherwise new equity wb taking 2x dilution on their piece.

3 years ago | like reply | 1 like

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