What Is Rollover Equity in a Business Sale?

When selling your business, you don’t always have to walk away completely. In fact, many owners choose to stay partially invested to share in the company’s future success. This approach — known as rollover equity — can be a powerful way to maximize long-term value.

At Merit Investment Bank, we help business owners understand and structure rollover equity opportunities that align with their goals and risk tolerance.

Understanding Rollover Equity

Rollover equity means that, as part of the sale, you retain a minority ownership stake in the company after the transaction closes. Instead of receiving 100% of the purchase price in cash, you “roll over” a portion of your equity into the new ownership structure.

This arrangement allows you to continue participating in the company’s future growth and upside potential — often alongside a private equity firm, family office, or strategic buyer who provides additional capital and resources to accelerate expansion.

Why Sellers Choose Rollover Equity

Rollover equity is common in transactions where the seller wants to stay involved or benefit from a second liquidity event down the road. Key advantages include:

• Sharing in future value creation when the business grows under new ownership.
• Alignment with the buyer’s goals, fostering a collaborative partnership.
• Potential for a “second bite of the apple” — earning additional returns when the company is sold again or recapitalized in the future.

Structuring It Right

While rollover equity can be highly rewarding, it’s important to structure it carefully. At Merit Investment Bank, we help sellers understand how ownership percentages, governance rights, and exit terms affect their long-term returns. We ensure your rollover investment is positioned to protect your interests and maximize future value.

The Bottom Line

Rollover equity offers the best of both worlds — liquidity today and participation in tomorrow’s growth. For many business owners, it’s a strategic way to stay connected to their legacy while benefiting from the resources and scale of new ownership.

Book a free confidential call today!

The Best,

J. Craig Dickens 
Chairman
Craig.Dickens@MeritInvestmentBank.com
253-370-8893

Merit Investment Bank as a leading boutique investment bank is focused on entrepreneurial middle-market companies. Merit Investment Bank Executes sell-side M&A, buy-side M&A, and capital advisory services, debt and equity capital raises, corporate finance, and valuation services. Securities offered through Finalis Securities LLC Member FINRA/SIPC. Merit Investment Bank and Finalis Securities LLC are separate, unaffiliated entities.