Not all purchase price is equal
Compare cash, credit risk, performance risk, and future upside.
Two offers with the same headline value can have very different economic value.
Cash at closing is the clearest form of consideration. Once closing conditions are satisfied, the seller receives the funds and eliminates most future performance and credit risk.
A seller note means the buyer pays part of the price over time. It can bridge a financing gap and may provide interest income, but the seller becomes a lender. The note should be evaluated for security, priority, covenants, repayment schedule, and the buyer's ability to pay under adverse conditions.
Equity rollover means the seller reinvests part of the proceeds in the buyer or the continuing company. It can create meaningful upside in a second sale, but it remains an illiquid investment. Evaluate governance, dilution, distribution policy, information rights, capital structure, transfer restrictions, and the buyer's track record.
An earnout pays only if the business achieves defined post-closing results. It can bridge a valuation disagreement, but it also leaves the seller exposed to performance and decisions after control has transferred.
The correct comparison is risk-adjusted and after tax. Ask how much is certain at close, what conditions control the rest, who controls those conditions, when payment occurs, what security exists, and what happens in a refinancing, add-on acquisition, management change, or sale of the company.
Headline value is marketing. The consideration schedule and legal rights determine what the seller may actually receive.