
How to Structure Rollover Equity to Minimize Risk
Rollover equity can be a smart way to align buyer and seller interests, but it introduces risks if not structured carefully. To minimize exposure, sellers should negotiate key terms like rollover percentage, voting rights, and exit provisions, while also modeling different scenarios to understand best- and worst-case outcomes. Working with legal, tax, and financial advisors ensures compliance, protects against dilution, and creates a framework for fair returns over time.