Working for a company with an option to buy later?

by a searcher from University of Virginia-Darden - Darden School of Business

2 years ago

Hi all,

Does anyone have experience proposing to work for a company with an option to buy it later? I'd love to hear your experience and how you structured it with the sellers. 

I came across a small training company (in Canada) with an interesting product which doesn't have a lot of competitors. They have a decent customer roster consisting of large corporations. One owner is looking to exit and other has flexibility to stay for a while. 

The Company is smaller than our target size, and has had a few down years during Covid. Before that the growth was flattish. I think acquiring it right now doesn't make sense as bank financing will be challenging (due to the low Covid years), and I want build more comfort that the company can grow.

Appreciate any advice.

5 likes
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13 comments

searcher from Central State University

Do you like this company that much? There are lots of fairly priced profitable companies in Canada. Why not grab one of those as opposed to a company that needs to be nursed back to heath, assuming it can be brought back to profitability.

2 years ago | like reply | 0 likes

searcher from Austin Community College

This can be a consulting for equity play. Get them to pay you for a half day growth consult. You give them strategies they can implement immediately to make more money. Then make it clear you want to come in as a partner to help them grow the biz. and position it to sell. You can even help them grow through acquisitions. They give you up to 50% equity. Use clauses to guarantee payout when the business sells or goes public. Another clause to explain liabilities and one stating the option to buy out remaining equity after a certain time period. Using this route is one that is more profitable. If anyone wants to know more about this method or wants partner with me on anything like this,

feel free to reach out.

2 years ago | like reply | 1 like

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