Our leadership team wants to buy me out, but they want me to seller-finance ninety percent of the deal. How do I weigh this internal succession route against the clean break of a third-party strategic sale?

Question

Tyler Smith · Accepted Answer

An internal buyout sounds appealing because it preserves your legacy and keeps the existing culture intact. However, if your leadership team requires you to carry a ninety percent seller note, you are not actually exiting. You are simply trading your operational risk for credit risk, with zero control over the daily execution. If they make a bad strategic move, your retirement security is on the line. To evaluate this properly, look at your Accountability Chart and assess if they truly have the GWC, meaning they get it, want it, and have the capacity to lead at the ownership level. If they lack the financial capacity to bring significant equity to the table, they are not ready. A third-party strategic buyer will typically pay a higher multiple, offer more cash at close, and provide a clean break. If you choose the internal route, you must structure it over a longer runway, using a phased buy-in where they earn equity by hitting specific operational milestones on the V/TO. Do not simply hand over the keys and hope for the best. Use your Level 10 Meeting structure to stress-test their independent decision-making for at least twelve months before signing any transition agreements.