The buyer matters as much as the headline price
The CS Design Builders story shows how retained risk can follow a seller home.
A published account of David Chang’s sale of CS Design Builders is a useful warning about evaluating the buyer, not only the price.
Chang accepted a restructured transaction that left him financing part of the purchase. The buyer later missed payments, while obligations tied to the business still exposed Chang. He ultimately took the company back and closed a weakened operation. The stated sale price did not protect him from the risk embedded in the structure or from a buyer that could not execute the plan.
That lesson applies well beyond seller financing. An attractive headline value can depend on an earnout, rollover equity, a note, broad indemnities, or a long employment commitment. Each term transfers a different kind of risk back to the seller.
Before selecting a buyer, test both capacity and conduct. Is financing committed? What capital remains after closing? Who has authority to approve the transaction? How has the buyer handled difficult investments? If a note is proposed, where does it rank, what secures it, and what happens after a payment default? If personal guarantees exist, when and how are they released?
The right comparison is the whole outcome: cash received, obligations retained, governance, operating plan, and likelihood of payment. Price matters. The buyer’s ability and incentives determine how much of that price becomes real.