What you actually get when you sell

I've sold two companies, Devx in 2020 and my half of Zaloto in 2022, and both times I pushed for cash at closing. The price in the press release and the money in your account are often two different numbers. Part of the price comes in the buyer's shares, which you can't sell for a year or more and which fall when its stock does. Part is an earn-out on someone else's targets, part sits in escrow, and if you raised money, the investors get paid first. Put in the terms and see what lands in your account.

Start from

The price, and who shares it

Headline price

million

You own The rest is co-founders, the option pool and others.

Investors own Their stake if they converted to common.

Investors put in

million

Everything raised, in total, with a 1× non-participating preference.

How it's paid

In the buyer's shares Locked up, so you can't sell them straight away.

As an earn-out Paid later, only if targets are hit.

Held in escrow Taken out of the cash, released later if no claims come.

Advisers and lawyers Of the headline price, paid at closing.

The small print

Lock-up on the shares How long before you can sell them.

Earn-out runs Years you keep working to someone else's targets.

Earn-out you'll really get Be honest. Targets are set by the buyer.

If the buyer's stock moves

Only the part paid in shares moves with it. Drag the slider or the chart.

Their stock after the lock-up

As a table

Their stock	You get	Of your share

What you get At closing In the end

Where it comes from

“Your share on paper” is your stake times the headline price. The preference is a 1× non-participating one, worked out on the headline price after fees, and your part of what's left applies to every piece of the payment. Before tax, and without discounting money that comes later. The presets are illustrative mixes, not market data.

What I'd do differently

The biggest mistake I made was selling without an M&A adviser. Not because of the price, but because of information. I like being open, and in a negotiation openness about your valuation, your deadlines and your reasons to sell is exactly what the other side can use. An adviser would have helped me give away less.

As for why founders sell at all, Tomáš Čupr put it best: either you're bored, or you know more than the buyer does.

Some of this first came up in an interview with CzechCrunch.