What Exactly is a Rollover and Why Should a Seller Care?

About the Episode

Selling your business through a rollover is complicated. Attorney Trevor Crow breaks this technical topic down into clear language as he explains how a rollover works, discusses major terms and documents involved, offers insights into the tactics and negotiating strategies employed by PE firms, explains what to expect, and highlights the critical element of understanding the economic provisions involved in a rollover. Listen to this discussion and maintain your negotiating leverage by knowing what to expect.

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“I think the seller’s expectation during rollovers should be that you’re going to lose control of the company, but there are things you can do to help alleviate the pressure of that.”

Trevor Crow

In this Episode

Learn More About This Episode

• Earnouts When Selling or Buying a Business | Complete Guide
• Retirement Funds Financing When Buying or Selling a Business
• Small Business Acquisition Financing
• M&A Guide | The 4 Types of Buyers of Businesses

Listen to Other Episodes

• Upper Middle-Market M&A
• How to Use Your Retirement Account to Fund Your C Corp and Other Funding Options
• Selling Your Company to a Private Equity Firm vs. a Family Office

Acronyms or Terms Used in This Episode

• Family Office – a privately held wealth management firm that works with just one or a few wealthy families with the goal of protecting and increasing their wealth over generations
• Search Fund – a form of private equity in which the fund looks to acquire firms where that will also take an active role in the operations of the company after the acquisition
• Earnout – an agreement where the buyer pays part of the purchase price to the seller based on the future performance of the company or the fulfillment of some other specified event
• VC – venture capital – firms that raise money from limited partners (LPs) to invest in promising startups or even larger venture funds
• LLC – limited liability company – a legal business entity that limits the amount of personal liability its owners are exposed to
• UBTI – unrelated business taxable income
• C Corp – a corporation that has elected to be taxed as an entity separate from its shareholders and may therefore be subject to double taxation if a sale is structured as an asset sale
• S Corp – a state-incorporated business that elects to receive special tax treatment
• LOI – letter of intent

Meet Our Guest

Trevor Crow

Attorney and Co-Founding member at Doida Crow Legal | Denver, Colorado

Trevor Crow is an attorney and co-founding member at Doida Crow Legal, which started in 2021. Trevor specializes in business transactions, including the purchase and sale of businesses, entity selection and formation, equity and debt financing transactions, and complex joint ventures. He also counsels business entities and individuals on income tax planning and transactional tax planning.

Trevor co-founded Crow Legal LLC in 2018 and worked as an attorney and director at Otten Johnson from 2014 – 2018. He holds both a J.D. and an L.L.M. in Taxation from the University of Denver – Sturm College of Law and has a B.A. in Finance from the University of Colorado at Boulder.

LinkedIn: https://www.linkedin.com/in/trevor-crow-5001121/