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Seems odd the previous owner accepted such a low monthly payment. I guess it required a lot of work? Or perhaps the owner felt the downside risk was substantial
by totoglazer 6y ago
Seems odd the previous owner accepted such a low monthly payment. I guess it required a lot of work? Or perhaps the owner felt the downside risk was substantially higher than it appears?
- deleted 6y ago[deleted]
- Tuna-Fish 6y agoHe got to keep 20%, and the new owners were much more interested in putting in the work for growing the business than he was. 20% of a business that's now more than 5 times the value it was when he sold 80% of it, plus $400k cash, and not having to work on it at all anymore can be a pretty good deal on it's own...
- treelovinhippie 6y agoThe equity piece is the key. If you sold for a lump sum you're all out and happy. But I imagine if you sell for a monthly payment, you're still emotionally attached. Would suck to check on how the business is going and regret your decision to sell for a monthly payment with no equity.
- hayd 6y agoIt does depend how unscrupulous the buyer is... you may end up being cheated out of your equity. That said, I like the cash-equity split without the condition of working on the project further yourself. It gives an incentive for the seller to not disappear/become uncontactable...
- marcins 6y agoMy understanding is the numbers in the article are made up to illustrate the deal structure, not the actual numbers in the deal.