The FNDRS Playbook · PB15 · Structure
The certainty curve
Structure trades certainty for upside. Know where you want to sit.
The idea
Structure trades certainty for upside. Know where you want to sit.
A full cash sale is the most certain and the most final. A majority recapitalization with rollover is less certain and has more upside. A minority sale keeps the most upside and the most risk.
None is right in general. One is right for you, and that depends on the number you need, your appetite for a second act, and how much you trust the buyer.
The three P’s
Where this chapter sits
This chapter supports the three levers rather than pulling one of them.
Positioning
Which category. Where in the range.
Pre-emption
Find it first. Frame it first.
Process
Competition. Timing. Leverage.
The figure
Four structures along one curve
Potential total proceeds against the certainty of receiving them. The curve slopes down: more upside, less certainty.
- Minority sale, keep controlMost upside, least certainty, least liquidity.
- Majority recap with 20 to 40% rolloverMeaningful cash now, a second bite later.
- Full sale with an earn-outMost of the cash now; some of it at risk.
- Full cash saleCertain and final.
The middle of the curve is where most founders with a strong buyer should land.
How to read it
A curve showing that structures with more potential upside carry less certainty. Four common structures are placed along it, from a minority sale (high upside, low certainty) to a full cash sale (lower upside, full certainty).
Premium exits are not negotiated. They are prepared.
What you keep.
More in Structure
See where your business sits
The Go-To-Market Analysis (GTMA) places your business on these frameworks with your own numbers, before a buyer does.