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NO B.S. Guide to Selling Your Company for Top Dollar 19CHAPTER 2 / MY STORY OF SELLING MY COMPANYa mistake. The strategies drawn from or used in my experiences can easily translate and apply to any business and its sale. Now, let me quickly explain %u201cequity without equity.%u201d While selling 100 percent of my company, as part of that agreement and WKH%u0003 %u0016%u0010\\HDU%u0003 SRVW%u0010VDOH%u000f%u0003 GH%u00c0QHG%u0003 UROHV%u0003 ZRUN%u0010IRU%u0010KLUH%u0003 DJUHHPHQW%u000f%u0003 ,%u0003obtained royalties tied to certain upsides, such as the number of active recurring revenue members, but maybe most importantly, to the sale price of that buyer%u2019s next sale. The bad news of such an arrangement is that the royalties are taxed as earned income, not capital gains. The good news is that, as a non-owner, I had zeroliability for anything, and zero managerial responsibilities. There FRXOG%u0003EH%u0003QR%u0003SDUWQHU%u0010W\\SH%u0003DUJXLQJ%u0003RYHU%u0003GHFLVLRQV%u0003D%u037fHFWLQJ%u0003QHW%u0003SUR%u00c0WV%u0003because I did not own any of the company; I received royalties RQ%u0003 JURVV%u0003 UHVXOWV%u0011%u0003 )O\\%u0003 %u00c0UVW%u0003 FODVV%u000f%u0003 %u00c1\\%u0003 FRDFK%u000f%u0003 KLUH%u0003 FLUFXV%u0003 SHUIRUPHUV%u0003for the next event, or don%u2019t; I can be emotionally distanced and practically disinterested. This arrangement is unusual. Unheard of, by many business brokers, lawyers, CPAs, and sellers. That does not make it impossible to get. Just unusual and unheard of. I have not only secured lucrative equity without equity when selling my company, and even when that buyer sold, with the new buyer; I%u2019ve also gotten it with a few consulting contracts.If you have particular expertise or are, in any way, extraordinarily desirable to retain in some role(s) with the business and you are of arguably greater value than just the very common %u0016%u0010\\HDU%u0010DIWHU%u0010VDOH%u0003DYDLODEOH%u0003LI%u0003QHHGHG%u0003IRU%u0003DGYLFH%u0003DQG%u0003VRPH%u0003SRVW%u0010VDOH%u0003communication with customers, then you have the basis to obtain the same kind of unusual contract and compensation that I did.If you prefer actual equity, maybe in a case where the future more likely holds an IPO than another sale, you can get that instead of equity without equity. Just remember that you never get what you don%u2019t ask for.Preview Copy | 33
