Cash at close
Cash at close is the part of the purchase price paid in cash on the day the sale closes, the most certain layer of the price.
In a sale
Why are offers compared on cash at close first?
Because it is the most certain part of the price: two offers with the same headline can differ by millions in what the founder keeps, and the difference is in the layers above cash at close. An escrow, a seller note, an earn-out, and rollover equity each arrive later and depend more on the buyer. A founder decides which of those layers to accept before the first letter of intent arrives.
Where it comes up
Read it in context
In the articles
- Where founders leave money on the tableMost of what founders lose in a sale is lost in their own decisions, and each one has a fix.
- Same business, two outcomesTwo identical businesses, one prepared and one not, sell for very different prices.
- What an LOI is really sayingThe headline is one term of nine. Here are the other eight.
- The second biteIn the right recap, the second sale is larger than the first. In the wrong one, it is zero.
- Strategic, platform, add-on, sponsor: who buys whatDifferent buyers pay for different things. The process should include several.
- Structure is priceTwo offers with the same headline can differ by millions in what you keep.
In The FNDRS Playbook
- PB13 Headline vs. take-homeTwo offers with the same headline can differ by millions in what you keep.
- PB14 The consideration stackPurchase price is a stack of layers with different certainty and different timing.
- PB17 The rollover decision matrixRoll equity when you trust the buyer and do not need the cash.
- PB26 The founder’s two scorecardsBuyers score the business. Founders should also score the deal.
See the terms with your own numbers
The Go-To-Market Analysis (GTMA) builds the file a buyer would build on your business, before a buyer does.