The most logical buyer for your business is your management team. They know the
business, they know the customers, and they are motivated.
You can decide to sell all or just part of the business to your team, providing them
with incentives to perform and create profitability, cash flow and value. In
most cases, the team will not have the financial resources needed to purchase
the company outright, and may have to use leverage (see our LBO page) in order to do the deal.
With a MBO, the company stays in the "family." You may decide to keep a
little of the equity in order to keep you hand in and hopefully capture some
upside. Your employees will have less disruption and the chain of command stays
The biggest obstacle in many cases is the ability of the management team to obtain
the financing necessary to execute the transaction. One funding strategy to
consider is the use of a TIGRcub®
security, in which the existing revenue stream of the company may be leveraged
to provide the capital needed to execute the transaction.
If this is the option you
wish to take, you can explore the option thoroughly at your convenience, as
nobody outside the company needs to know that there is a potential transition on
can help you and your management team analyze this possibility and identify
possible lenders that can fund this type of transaction.