Know the language. Keep your options.
Learn the concepts behind building, retaining, partly selling or fully transferring a business. This is education, not individualized legal or investment advice.
Build value
Identify customer outcomes, retained demand, rights and delivery economics.
Start with the moat test ↗Create options
Learn the difference between asset sale, equity sale, minority liquidity and a recapitalization.
Follow the cash ↗Prepare to transfer
Gather the evidence, rehearse the operating handoff and bring in qualified professionals.
Prepare the information ↗Ownership terms, translated.
Enterprise value
The modeled value of the operating business before the agreed cash/debt bridge. Not automatically the seller’s proceeds.
Read the related playbook ↗Equity value
The value attributable to ownership after the applicable cash, debt and transaction adjustments.
Read the related playbook ↗Seller discretionary earnings
A small-business earnings measure with specific owner-benefit adjustments; it requires reconciliation and is not interchangeable with EBITDA.
Read the related playbook ↗EBITDA
Earnings before interest, taxes, depreciation and amortization. Normalization and replacement labor require review.
Read the related playbook ↗ARR and MRR
Annual or monthly recurring revenue measures. One-time projects and lifetime licenses are not recurring subscriptions.
Read the related playbook ↗Quality of earnings
An examination of reported earnings, adjustments and sustainability; not just a revenue screenshot.
Read the related playbook ↗CIM
A confidential information memorandum describing a potential transaction and the business, subject to diligence.
Read the related playbook ↗Letter of intent
A document proposing deal terms; binding and nonbinding provisions vary. It is not released acquisition proceeds.
Read the related playbook ↗Earnout
Contingent future consideration tied to agreed outcomes. Model timing and collection risk separately from closing cash.
Read the related playbook ↗Seller financing
A portion of the price owed later under agreed financing terms, not cash collected today.
Read the related playbook ↗Asset sale
A transfer of specified assets and agreed obligations. Customer, software and platform contracts may need separate consents.
Read the related playbook ↗Equity sale
A transfer of company ownership interests, with different liability, tax and regulatory questions from an asset sale.
Read the related playbook ↗Minority liquidity
A sale of less than a controlling interest or a shareholder secondary. This is not the same underwriting or legal path as a complete exit.
Read the related playbook ↗Recapitalization
A change to the financing or ownership structure, sometimes providing partial owner liquidity while retaining ownership.
Read the related playbook ↗Strategic acquisition
A purchase motivated by a buyer-specific capability, market, distribution, technology or other complement.
Read the related playbook ↗Portfolio bolt-on
A business added to an existing portfolio where a shared operating or distribution model may improve economics.
Read the related playbook ↗Buy box
A buyer’s stated criteria. Matching them is not proof of funds, willingness to buy or an offer.
Read the related playbook ↗Transferability
The practical and contractual ability to pass a business’s value and operation to another owner.
Read the related playbook ↗Model dependency
Reliance on a particular AI provider, capability, cost structure or access policy.
Read the related playbook ↗Related-party deal
A transaction involving an affiliated party. The relationship must be disclosed rather than hidden behind editorial ranking.
Read the related playbook ↗