Seller note
Part of the price paid by the buyer over time, documented as a loan from the seller, usually subordinated to bank debt.
In a sale
What it changes in a sale
A seller note turns part of the price into a loan from the founder to the buyer, repaid over time. Because it usually ranks behind the buyer's bank debt, how certain it is depends on the buyer's ability to pay. It sits above cash at close in the stack of what a founder is paid: agreed, but not yet received.
Where it comes up
Read it in context
In the articles
- Same business, two outcomesTwo identical businesses, one prepared and one not, sell for very different prices.
- What an LOI is really sayingThe headline is one term of nine. Here are the other eight.
- When a buyer calls firstAn inbound offer is information, not a decision.
- Bigger before you sell: combinations and add-onsSometimes the best pre-sale move is an acquisition of your own.
- Structure is priceTwo offers with the same headline can differ by millions in what you keep.
In The FNDRS Playbook
- PB25 The combination matrixSometimes the best pre-sale move is an acquisition of your own.
- PB13 Headline vs. take-homeTwo offers with the same headline can differ by millions in what you keep.
- PB14 The consideration stackPurchase price is a stack of layers with different certainty and different timing.
- PB18 The earn-out design gridAn earn-out you cannot control is a price cut with extra steps.
See the terms with your own numbers
The Go-To-Market Analysis (GTMA) builds the file a buyer would build on your business, before a buyer does.