I want to sell the business or hand it on
Ways for owners to sell all or part of a business, to staff, managers or investors.
Most routes on this site bring new money into a business. The routes here are different: most of them pay the owners for their shares, so the business itself may get little or no new money.
The main choices are who buys. Staff can own the business through an employee ownership trust. Managers can buy it in a management buyout. Investors such as private equity firms or family offices can buy part or all of it. Each route says on its page whether any new money comes in, and what the tax rules are.
5 routes to look at, cheapest first
Compare the first 4 side by side- Equity rungs. These routes cost no interest, but you give up part of the ownership and control of your business. They are ranked by how much you give up, not by a made-up interest rate. Over time, equity can be the most expensive money of all.E2
Significant dilution and investor rights
Investors take a meaningful stake and usually get rights such as a board seat, a veto over big decisions, or a preferred return.- Private equity investment
Family offices and wealthy private investors
Wealthy families, often through a private company that manages their money (a family office), invest directly in businesses. They can be more patient and flexible than funds, but there is no standard process and they are hard to find.
6 months or moreGives up shares - Public and quasi-public markets
PISCES (trading days for private company shares)
A new kind of regulated market where shareholders in a private company can sell existing shares on set trading days. It does not raise new money for the company, but it lets founders, early investors and staff sell some shares while the company stays private.
MonthsGives up sharesNot a raise
- Private equity investment
- E3
Major dilution, loss of control or public obligations
Investors take control, or the company becomes publicly traded and takes on ongoing public rules, costs and scrutiny.- Private equity investment
Employee ownership trust (a sale, not a raise)
Owners sell a controlling stake to a trust that holds it for all employees, usually paid over time from the company's profits. This is a way for owners to sell, not a way for the business to raise money.
6 months or moreGives up sharesNot a raise - Private equity investment
Management buy-out or buy-in
Managers buy the business from its owners, usually funded by private equity and borrowing. It lets owners sell and managers take control, but it loads the business with debt and gives investors a large stake.
6 months or moreGives up sharesPersonal guarantee likely - Private equity investment
Private equity (including buy-outs)
A private equity firm takes a large or controlling stake in a mature business to help it grow, often through a management buy-out or buy-in, and sells the stake a few years later.
6 months or moreGives up shares
- Private equity investment
Worth knowing
- A sale can take a year or more. Accounts, contracts and who owns what need to be in order before buyers look.
- The price is often paid over several years. Read what happens if the business does badly before you are paid in full.
- The tax on a sale depends on the route and on you. A tax adviser can explain it.