October 16, 2024 | less than a minute read

Up and Downs of Rollover Stock

Stock exchange collectibles. Old stock share certificates from 1950s-1970s (United States). Vintage scripophily objects (obsolete).

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Barry Fischer

Partner

Get in touch

Barry Fischer

Partner

Here's a nice summary by my partner Nathan Viehl about the benefits and pitfalls of “rollover equity” when selling a business to a private equity firm.

Nathan notes that aligning your expectations around control, getting comfortable operating with debt, and prioritizing short-term results can help make a successful transition.

While this can be an enticing opportunity to capitalize on future growth by taking a “second bite at the apple,” there are several key differences that sellers should be aware of that might change the incentive structure they have grown accustomed to in running their own founder-owned business.