Compare five ways to sell a business on your own numbers. See the cash you keep at completion, the expected total after tax, and what each structure is worth in today's money.
Start from a typical profile
Share sale with equity rollover
The seller reinvests part of the price alongside the buyer for a second payout when the business is sold again.
| Structure | Headline | Cash at close | Expected total | Value today | At risk | Final payment |
|---|---|---|---|---|---|---|
| Share sale with equity rollover | $10.0M | $6.40M | $10.4M | $8.88M | $2.00M | Year 5 |
| Share sale, all cash | $10.0M | $8.00M | $8.00M | $8.00M | – | At close |
| Share sale with earnout | $11.2M | $6.72M | $8.18M | $7.92M | $2.24M | Year 2 |
| Share sale with vendor note | $10.0M | $6.80M | $8.14M | $7.92M | $1.20M | Year 3 |
| Asset sale | $10.4M | $7.49M | $7.49M | $7.49M | – | At close |
All figures are after the seller's tax. Value today discounts later payments at your discount rate, which is how a buyer compares an earnout with cash.
Indicative only. Tax is simplified to a single capital gains rate plus any extra asset-sale tax you enter. Treatment varies by jurisdiction, entity type and deal terms, so take tax and legal advice before agreeing a structure.
How the four core structures compare on tax, liabilities, control, cost and timing. Highlight one to read it column by column.
| Criteria | Asset Sale | Share Sale | Earnout | Equity Rollover |
|---|---|---|---|---|
| Structure Overview | Buyer acquires specific assets and liabilities. Entity remains with seller. | Buyer acquires 100% of shares. Entity transfers with all assets and liabilities. | Portion of price paid post-close, contingent on hitting agreed milestones. | Seller retains a minority equity stake in the business post-close. |
| Seller Tax Treatment | Varies. Assets taxed at ordinary income rates in many jurisdictions. | Typically CGT treatment. More favourable in most jurisdictions. | Deferred income. Tax timing depends on when payments are received. | Partial CGT event at close. Remaining stake taxed on future exit. |
| Buyer Tax Treatment | Step-up in asset basis. Depreciation and amortisation deductions available. | No step-up in basis. Inherits historical tax position of the entity. | Payments may be deductible as they are made. Reduces upfront capital outlay. | Partial acquisition. Tax treatment depends on jurisdiction and structure. |
| Liability Transfer | Buyer selects which liabilities to assume. Historical liabilities stay with seller. | All liabilities transfer with the entity, including undisclosed and contingent. | Depends on underlying structure (asset or share). Earnout is a payment mechanism, not a structure. | Liabilities transfer with entity. Seller retains exposure through retained equity. |
| Complexity / Legal Cost | Moderate. Requires individual asset transfer documentation. | Lower. Single share transfer. Simpler for digital businesses with clean cap tables. | High. Milestone definitions, audit rights, and dispute mechanisms add significant legal complexity. | High. Shareholder agreements, drag-along, tag-along, and governance provisions required. |
| Seller Control Post-Close | None. Full exit. Seller has no ongoing role unless contracted separately. | None. Full exit. Seller may be retained as employee or consultant under separate agreement. | Limited. Seller has economic interest in outcomes but buyer controls operations. | Retained. Seller holds board seat or observer rights proportional to equity retained. |
| Valuation Gap Resolution | Limited. Price is fixed at close. No mechanism to bridge forward-looking disagreements. | Limited. Same as asset sale. Price adjustments via locked box or completion accounts only. | Excellent. Directly bridges gaps by tying future payments to actual performance. | Strong. Seller participates in future upside, reducing pressure on upfront price. |
| Common Use Cases | Distressed sales, IP acquisitions, partial business carve-outs, asset-heavy businesses. | Clean digital businesses, SaaS, fintech, content platforms with simple cap tables. | High-growth businesses, founder-led companies, deals with forward revenue uncertainty. | PE-backed recaps, management buyouts, strategic partnerships, second-bite transactions. |
| Typical Timeframe to Close | 6 to 12 weeks (plus asset transfer logistics) | 4 to 10 weeks (simpler documentation) | 8 to 16 weeks (milestone negotiation adds time) | 10 to 20 weeks (governance documentation) |
The buyer acquires specific assets (domain, code, customer lists, IP, contracts) rather than the legal entity. The seller retains the corporate shell and any liabilities not explicitly transferred.
The buyer acquires 100% of the shares in the operating entity. All assets, contracts, employees, and liabilities transfer automatically with the entity. Most common structure for clean digital businesses.
A portion of the purchase price is deferred and paid based on post-close performance. Used to bridge valuation gaps where buyer and seller disagree on forward projections. Can be layered on top of an asset or share sale.
The seller receives cash for a majority of their equity but retains a minority stake in the business post-close. Common in PE-backed transactions where the buyer wants the founder to remain aligned with growth.
A $12M offer with $3M of earnout is not worth $12M. Weight each deferred payment by the chance it is paid, take off tax and discount it for time. The calculator does that for every structure, so two offers can be compared on equal terms.
Earnouts close a valuation gap when the seller expects growth the buyer will not yet pay for. Keep targets on revenue or gross profit the seller can influence, cap the period at two or three years, and model the scenarios in the earnout modelling tool.
Private equity buyers often ask founders to roll 10% to 30% of their proceeds. If the buyer grows the business and sells again, the rolled stake can be worth two to three times as much. The trade-off is less cash now and a minority position with limited control.
Every structure has to be funded. See how senior debt, vendor finance and an earnout fit together in the capital stack builder, and compare tax settings across markets in the jurisdiction comparison tool.
Buy-side and sell-side mandates across any sector and any market. If it is a real transaction, bring it to us.