MicroAcquire explains five ways to structure a startup sale: cash upfront, down payment plus financing, earnouts, equity swaps, and mergers. Understanding these options helps founders attract more buyers and close deals faster.
As a founder, the more you're educated on common deal structures, the better because you widen your buyer pool by doing that. Break all cash up front. Quick due diligence, cash up front. This is the simplest deal structure, typically the gap closer. So this would be a down payment plus financing. I like these ones. These ones can dramatically increase the buyer pool for your startup, especially if you're looking to sell it quickly and move on to something else. Deal savers so this is down payment plus financing plus earn out. Essentially you're selling the business, they're going to give you 50% upfront, they're going to finance it over a period of time plus there's an earn out down payment plus equity plus financings. If the buyer has a proven track record of 10xing companies, you could potentially have a chance to be a part of that 100% financing plus earnout. Your business isn't attracting too many offers. You really just want to sell it to something. Maybe you find someone that has a lot of passion and can breathe a lot of new energy into the business and they'll essentially just grow it more than you. The last one is equity swaps. You built a great piece of software. You no longer typically want to work on this piece of software just sitting idle. Maybe it's a good business, but you know, you feel it'd be more valuable in the hands of someone else. Maybe there's a negotiation opportunity for you to discuss equity in their company in exchange for acquiring your company. So maybe you're both in the same industry. Maybe you should just combine and this is kind of like mergers.
The Buyers Who Made the Move: What They Bought, How They Did It, and What Happened Next
