Episode 37: Sell Side Short on Rollover Equity

Reps and warranty insurance can be an important tool when selling a business, helping sellers reduce risk and potentially keep more cash at close.This Sell-Side Short breaks down how reps and warranty insurance works, what it can cover, how it impacts escrow requirements, and why it has become increasingly common in M&A transactions. We also cover what typically isn’t covered, including known issues identified during due diligence.

For business owners considering a future sale, charitable giving can be an important part of the planning process long before a transaction closes.Mike Booth, Senior Gift Planner with National Christian Foundation, joins The Sell Side to discuss how business owners can incorporate charitable giving into an exit strategy. Mike breaks down donor-advised funds, gifting appreciated business interests, the importance of timing a gift before a binding sale, and the differences that can come with C corporations and S corporations.The conversation also covers qualified appraisals, estate planning, rollover equity, earn-outs, and why getting your M&A, wealth, tax, and charitable advisors involved early can create more options for business owners and their families.

In this episode, we break down the concept of rollover equity, a common and crucial topic that frequently arises during mergers and acquisitions (M&A) transactions.The Basics of Rollover Equity: What it means to transition from a 100% owner to rolling a portion of your sale proceeds into the equity of the newly acquired company instead of taking it all in cash.The Role of Private Equity: Why private equity firms routinely insist on a 10% to 30% rollover structure to keep sellers incentivized and invested in the new entity's future success.The "Second Bite of the Apple": How younger sellers looking to stay in management roles can leverage rollover equity to secure massive value, sometimes even surpassing the original sale consideration.The Trust Factor: Why giving up control means you must have confidence in the acquiring firm's vision and execution strategy to maximize the value of your equity.Whether you are preparing for a business sale or navigating an ongoing deal, this episode provides foundational insights into how rollover equity can work for you.

In this episode, host Michael Stanley sits down with Zane Tarence, partner at Founders Advisors and author of The 17 Reasons Your Company Is Not Investment Grade. Drawing from his transition from an IBM software engineer to a successful tech entrepreneur and veteran middle-market investment banker, Tarence unpacks what it truly means for a private company to be "investment grade".He breaks down the critical levers that drive business valuation, emphasizing the power of hiring A-players, weaponizing clean financials through predictive modeling rather than just tax avoidance, and engineering highly valuable recurring revenue streams. Tarence also addresses common founder pitfalls, from customer concentration risks to managing the entrepreneurial ego when working out of the business to build transferable value. Whether you plan to sell soon, raise capital, or scale sustainably, this episode provides a strategic roadmap to giving your private business its own valuation "ticker symbol".https://www.linkedin.com/in/zane-tarence-22375323/https://www.linkedin.com/in/michael-k-stanley-jr-mba-cexp™-30916131/Use our complimentary code KeelPoint_FA to take the Founders' Investment Grade Assessment. Disclaimer: To provide securities-related services, certain principals of Founders Advisors, LLC are licensed with Founders M&A Advisory, LLC, member of FINRA & SiPC. Founders M&A Advisory is a wholly owned subsidiary of Founders Advisors. Neither Founders Advisors nor Founders M&A Advisory provide investment advice.

A signed Letter of Intent may feel like the finish line, but it is really only halftime.In this Sell Side Short, Michael explains why so many transactions fall apart after the LOI and how sellers can avoid common deal killers. He discusses the importance of disclosing potential issues early, maintaining clean financials, managing unexpected liabilities, and staying focused on business performance throughout due diligence.Michael also shares why sellers must remain levelheaded when challenges arise, trust their advisory team to find solutions, and understand how changes in EBITDA can affect the final deal. The key to reaching the closing table is preparation, transparency, and a commitment to keep working the process.https://www.linkedin.com/in/michael-k-stanley-jr-mba-cexp™-30916131/

In this episode of The Sell Side Podcast, Michael Stanley sits down with Todd Taylor, CEO, and Chris Holliday, CFO, of Taylor Electric to discuss the company's journey from a family-owned electrical contractor founded in 1970 to a successful platform acquisition.Todd and Chris share how they transformed the business by shifting from simply running a company to intentionally growing one. They discuss improving margins, preparing financials for a sale, building the right leadership team, and why creating opportunities for the next generation of employees became their driving motivation.The conversation also offers an inside look at the M&A process, including selecting the right investment banking team, navigating quality of earnings, due diligence, evaluating buyers, and ultimately choosing a partner that aligned with both their financial goals and their company's legacy.Whether you're a founder beginning to think about an exit or simply looking to build a more valuable business, this episode is filled with practical lessons on preparation, succession planning, and maximizing founder outcomes. 

In this episode of The Sell Side, we discuss what life after a business sale can really look like. From the emotional transition of no longer running the company you've built to planning your finances, finding a new purpose, and preparing for what's next, we explore the conversations every business owner should have before closing a deal.Whether you're considering selling in the near future or years down the road, this episode offers practical insights to help you prepare for the next chapter with confidence.

In this episode of Sell Side Shorts, Michael Stanley breaks down one of the most common deal-making tools used to close that gap: the earnout.Michael explains how earnouts work, why buyers use them to manage risk, and why sellers should approach them carefully. He also shares key considerations when structuring an earnout, including the importance of choosing the right performance metrics, avoiding potential pitfalls tied to EBITDA-based calculations, and creating a clear process for measuring results after closing.Whether you're preparing to sell your business or simply want to better understand M&A deal structures, this episode offers practical insight into how earnouts can help get a deal across the finish line while protecting both sides of the transaction.

In this installment of Sell Side Shorts, host Michael Stanley breaks down one of the most important — and often misunderstood — parts of the M&A process: the Quality of Earnings (QofE) report.Michael explains what a QofE report is, why buyers rely on it during due diligence, and how it impacts the final valuation of a business. From verifying revenue recognition and profitability to identifying potential risks or inconsistencies in financial reporting, this episode gives business owners a behind-the-scenes look at how buyers evaluate a company before closing a deal.The conversation also covers the difference between buy-side and sell-side QofEs, why project-based and seasonal businesses should strongly consider completing a sell-side QofE before going to market, and how a proactive approach can help reduce surprises, retrading, and stress later in the process.Whether you’re preparing to sell your business or simply want a better understanding of how buyers assess EBITDA and company value, this episode offers practical insight into one of the most critical financial steps in a successful transaction.

In this episode of the Sell Side Podcast, we sit down with Wilbur to take a deeper dive into one of the most active areas in private equity today: roll-up strategies in fragmented service industries.We break down why sectors like landscaping, HVAC, pest control, and pool services have become prime targets for investors—and what makes these businesses so attractive for acquisition and growth.From recurring revenue and customer retention to EBITDA, multiples, and working capital, this conversation walks through the key factors that drive valuation and buyer interest. We also explore the differences between residential and commercial revenue, why maintenance contracts matter more than installs, and how operational efficiencies can dramatically increase a company’s value.Beyond the numbers, we cover what buyers are really looking for—strong teams, clean financials, low customer concentration, and scalable systems—and how business owners can position themselves for a successful exit.Finally, we break down the different types of buyers—from strategic acquirers to private equity groups and family offices—and what each path means for life after the deal.If you own or operate a service-based business, this episode is packed with insights on how to grow, scale, and ultimately maximize the value of what you’ve built.🎙️ Listen now to learn how small businesses are being transformed into major opportunities through smart strategy and consolidation.