One thing that comes up a lot in conversations with owners is deal structure.
There's a bit of a misconception that buyers are just trying to put in as little cash as possible — that earn-outs, deferred payments and seller loans are all about delaying or avoiding the cost of acquisition. That's not really how it works in practice.
Structure is about making sure the deal works for both sides. The seller wants confidence that they're going to receive full value. The buyer wants confidence that the business will continue performing once the existing owner steps back. The structure is what bridges those two positions.
When we look at how to structure a deal, we tend to think about:
- How the business performs over time — does revenue continue, do customers stay, does the team remain in place?
- How risk is shared fairly — both sides should have skin in the game until the transition is genuinely complete
- What gives the seller confidence they'll get full value — clear milestones, transparent reporting, no surprises
Sometimes that includes deferred consideration paid against agreed milestones. Sometimes it includes external acquisition funding to provide more cash up front. Sometimes the seller wants to roll over a small minority equity stake to share in future upside. Sometimes none of that is needed and the deal is straightforward.
Every deal ends up slightly different. The variables — sector, owner involvement, working capital requirements, customer concentration, team strength — all influence what makes sense. There's no single template.
The best outcomes I've seen are where both sides feel comfortable with how the deal is put together — not where one side "wins". A negotiation that ends with one party feeling stitched up tends to make the post-completion period difficult, which then affects the business performance, which then affects whether the deferred consideration actually pays out. Everyone loses.
Get the structure right and the deal supports the business. Get it wrong and it works against it.