We are trying to decide between an outright strategic sale and a majority recapitalization with a private equity group, but our partners have conflicting personal timelines. How do we use our EOS V/TO to align our leadership team on the correct deal structure for our eventual exit?

Question

Tyler Smith · Accepted Answer

When partners are not on the same page regarding an exit, deal negotiations will fall apart under pressure. A strategic buyer wants a clean break and will demand that the founders transition out quickly. A private equity group doing a recapitalization wants you to roll over equity and stay in your seats to drive growth for a second bite of the apple.

To resolve this conflict, you must bring the partnership back to your EOS V/TO®. Open up your ten year target and three year picture in a dedicated planning session. Use this framework to align everyone on the ultimate destination of the business.

If some partners want immediate cash and a quick exit, while others want to continue growing the company, a majority recapitalization is often the perfect bridge. It allows the retiring partners to cash out their equity, while the remaining partners get the capital and operational backing of a private equity firm to scale.

Use your Accountability Chart to clarify who will fill the key seats post-close, ensuring that those who stay have the passion and capabilities to work with a financial sponsor. By grounding this decision in your long-term V/TO®, you remove the emotion from the table and choose the structure that matches your collective vision.