As the name suggests, a Staged Liquidity Transaction® gives shareholders the opportunity to sell a portion of their company while still maintaining a significant ownership stake - in essence creating liquidity and risk diversification today, while setting the stage for a second "payday" down the road. These transactions enable entrepreneurs to partially cash out of their investment in the business and capitalize on the enormous amount of sweat equity they have contributed over the years.
The Staged Liquidity Transaction® is very different from a complete sale of the company. The controlling shareholders continue as partners and managers of the company and the new partners are typically members of a Private Equity Group that share the ownership's culture and vision for the future of the business. Unlike strategic acquirers who purchase with a view towards eliminating overhead redundancies, Private Equity Groups prefer more passive or board level involvement and a collaborative relationship with the existing owner and management. As partners, these private equity groups are able to bring opportunities to the company that were not previously available, and can provide guidance and input in order to assist the company to its next level of growth.
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