When an offer for your company arrives, the eye goes straight to one number. It is the number you tell your spouse, and it is the number the buyer knows you will anchor on. It is also the least informative line on the page.
The headline price is a starting point. What matters is how much of it reaches you, when, and on what conditions. Two offers with the same headline can be very different deals, and an offer with a lower headline is sometimes the better one. I spent five years as a corporate lawyer papering these structures before I sold a company of my own, and the pattern has not changed: the structure is where the real negotiation happens.
1. From enterprise value to what you actually receive
Most offers for a private company are expressed as an enterprise value on a cash-free, debt-free basis. The buyer is pricing the business as if it had no bank debt and no surplus cash. At closing, debt is paid off out of the price, surplus cash usually comes back to you, and transaction costs come out.
None of that is unfair, but founders are often surprised by what counts as debt. Equipment leases, deferred bonuses, unpaid taxes and shareholder loans can all end up on the list. Ask the buyer early, in writing, what they include, rather than discovering it in the draft purchase agreement.
2. The working capital target
Nearly every deal sets a normal level of working capital the business is expected to deliver at closing: receivables and inventory, less payables and similar items. Deliver less than the target and the price goes down. Deliver more and it may go up.
The target is negotiated, and the method matters as much as the number. Which months are averaged, whether the business is seasonal, and how items like customer prepayments are treated can all shift the result. It is one of the least glamorous parts of a deal and one of the most consequential, so it deserves attention before the letter of intent, not after.
3. Holdbacks and escrow
Buyers usually keep back part of the price for a period after closing, in escrow or as a holdback, to cover claims if something you represented about the business turns out to be wrong. That is standard. What varies is the size, how long it is held, which claims it can be used for, and whether it is the buyer's only remedy or just the first one.
A clean business with organised records is in a stronger position to keep that portion small and short. It is one of the less visible rewards of preparation.
4. Earnouts and vendor notes
When a founder and a buyer disagree about the future, part of the price often becomes contingent. An earnout pays more later if the business hits agreed targets. A vendor note means you lend part of the price to the buyer and are repaid over time.
Both can bridge a real gap, and both carry risk you did not have before closing. An earnout depends on targets you may no longer fully control. A vendor note depends on the buyer's ability and willingness to pay. Treat these portions as worth less than cash at closing, because they are, and negotiate the terms around them with the same care as the price.
5. Rolling equity into the next chapter
A private equity buyer will often ask the founder to keep a stake, rolling part of the proceeds into the new company. Done well, this can be the most valuable part of the deal. My first sale was to a sponsor that gave management options and stock, and that stake was worth far more when the company was sold again a few years later.
Done badly, it is money tied up in a company you no longer control. Understand the rights attached to your stake, what happens to it if you leave, and how and when the sponsor expects to exit.
The takeaway
The headline price tells you what a buyer thinks your company is worth. The structure tells you what you will actually receive and how much risk you are still carrying after closing. Compare offers on cash at closing, on what is held back or deferred, and on the conditions attached to each part. Settle the main structural terms in the letter of intent while you still have alternatives, and bring your accountant and tax lawyer in early, because the structure also shapes what you keep after tax.
