When business owners begin thinking about an exit, they often assume there are only two choices: continue running the company or sell it entirely. There are several paths available. For some owners, a minority investment or partial sale can provide liquidity and a strategic partner while allowing them to retain meaningful ownership and control.
A majority sale is typically designed around a significant change in ownership and leadership. For owners who are ready to step away from day-to-day operations, this can provide a clear path toward retirement, a new venture, or the next chapter of life. It can also allow an owner to monetize a substantial portion of the value they have built.
A minority transaction offers a different approach. An owner may sell a portion of the company while retaining a meaningful equity stake. This can offer access to capital for expansion, create personal liquidity, or bring in a strategic or financial partner while allowing the owner to remain involved in the business. If the company continues to grow, the retained ownership can potentially increase in value over time.
The right structure ultimately depends on the owner’s goals. Some owners prioritize maximum liquidity and a defined transition, while others want to continue participating in future growth. Personal financial objectives, the strength of the management team, growth opportunities, and the owner’s desired level of involvement all play an important role in determining which path makes sense.
There are also important considerations around control and decision-making. A minority investment does not necessarily mean an owner retains complete control, and a majority transaction does not always mean an immediate departure. The terms of the transaction (including governance rights, management responsibilities, and future liquidity provisions) are critical to understanding what life after the transaction will look like.
This is why it is valuable to consider exit options before deciding that a full sale is the only solution. Exploring different structures can help owners identify an approach that aligns with both their financial objectives and their vision for the future.
Aberdeen Advisors is a boutique mergers and acquisitions firm. Our dedicated team is committed to helping business owners successfully navigate the intricacies of an ownership transition. Additionally, our team is made up of former business owners and C-suite executives who have run and sold companies. We pride ourselves on a successful track record of shepherding business owners through the M&A process to ensure a successful outcome.