Recapitalization
Also called recap
A transaction in which the founder sells part of the business, usually a majority, to a financial buyer and keeps a stake.
In a sale
What it changes in a sale
In a recapitalization the founder takes cash now and keeps a stake in the business alongside a new owner. If that owner grows the business and sells it later, the founder is paid again on the stake: the second bite. It suits founders who have already covered the number they need and who believe in the buyer's plan.
Where it comes up
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In the articles
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The Go-To-Market Analysis (GTMA) builds the file a buyer would build on your business, before a buyer does.