Why Sell a Minority Stake?

There are compelling reasons to sell a minority stake in a company:

• The owner wants to “take some chips off the table,” reducing their financial risk by diversifying their personal wealth.

• The owner enjoys leading the business on a full-time basis and wants to maintain control of the company.

• The transaction provides the owner with a new capital partner to finance future growth.

• The owner can let some of their equity “ride,” giving them a “second bite of the apple” when the company is sold in its entirety again, usually several years hence and hopefully at a much higher valuation.

• To gain a valuable partner with fresh ideas and often more rigorous oversight than the owner provides.

Next: Issues with a Minority Sale

Traversi & Company is a premier sell-side M&A advisory firm - a boutique investment bank - serving the lower middle market. Visit us here.