NiklasJames.com

Share Mgmt Fee w/ Seller?

It can feel awkward to impose a ~$250-400k mgmt. fee on a newly acquired company, especially if (i) the seller rolled substantial equity, (ii) the seller continues to run the company (full-time focus), or (iii) the company is facing turbulence.

One solution can be to share the management fee with the seller. If they rolled 30%, give them $90k of the $300k. Good optics, total alignment, pro-rata for ownership.

Be proactive: The seller won't know to ask, and often they won't even know about the management fee dynamics until after the txn has happened.

About the author

Hi, Niklas here 🙂📝

This is my journey as an independent sponsor & equity investor.

I publish tactical insights for deal-by-deal private equity.

Subscribe for my short-form content in your inbox (~3x/wk).

NiklasJames.com

Great! You’ve successfully signed up.

Welcome back! You've successfully signed in.

You've successfully subscribed to NiklasJames.com.

Success! Check your email for magic link to sign-in.

Success! Your billing info has been updated.

Your billing was not updated.