| Status Quo | Minority Sale | Majority Sale | Full Sale | ESOP | |
| Retained Ownership | 100% | >50% | Typically 10-40% | 0% | Varies |
| Operational Control | Maintained | Maintained | Released | Released | Maintained |
| Financial Value | None Realized | Partially Realized | Partially Realized | Fully Realized | Varies |
| Leadership | Continuous and Uniform | Continuous | Continuous and Dynamic | Dynamic | Continuous |
| Risks | Highest Liquidity and Execution Risk | Partial Reduction in Risk | Major Reduction in Risk | Full Reduction in Risk | Partial or Full Reduction in Risk |
| Potential Benefits | -Stability in the direction and the leadership of the business -Maintain operational and financial control |
-Investors provide additional capital support -Ability to participate in the future growth of the business -Partner willing to support growth or acquisition initiatives -Access to strategic resources: logistics, IT, HR, etc. -More robust financial reporting |
-Investors provide additional capital support -Ability to participate in future growth of the business -Access to strategic resources: logistics, IT, HR, etc. -Access to value-added support and strategic guidance -“Professionalization” of the business |
-Business value is fully realized and can be reinvested into lower risk investments -Access to strategic resources: logistics, IT, HR, etc. -Access to value-added support and strategic guidance -Complete alleviation of execution risk and succession planning concerns |
-Potential tax-free sale -Rewards employees -Keeps company’s culture in place -Allows owner to “structure” exit -Low execution risk -Maintain control while providing liquidity for the owner |
| Potential Implications | -Must fund the Company with internal cash flows -No way to monetize value in the Company beyond dividends or salaries -No new “blood” to diversify leadership -Complete execution risk lies with Management -Succession planning not addressed; “till death do you part” strategy |
-Middle management likely to stay post-transaction -Partner to share execution risk -Board representation / quarterly board meetings -Negative covenants, minority shareholder protections -Required exit in future (equity recap only) |
-Partner will seek aggressive growth and/or acquisition initiatives -Middle management could be eliminated post-transaction -Partner to share execution risk -Allows current ownership to transition out of the business over time |
-Cultural impact to the business -Integration risk -No participation in the future of the business |
-No outside expertise or synergies from potential partners -Repurchase liabilities -In a partial that moves to a full, valuation can be lower in a staged transaction -Cash flow to service debt and growth could become constrained |