What is a recapitalization?

Everyone knows what it means to “sell your business”. But did you know that it’s possible to sell part of your business?

A recapitalization gives shareholders (you!) 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 (ever hear of the term “second bit of the apple”?). 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.

A recapitalization 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.

The “second bite of the apple” presents a business owner with the opportunity to get paid twice. Potentially, this creates an even greater opportunity than selling your business outright. The greatest payout to all parties occurs after the business has achieved a new and elevated level of growth. The second payout for the original owner will often proportionally exceed the “first bite” payoff.


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.

Ideal for:

  • Owners seeking partial or complete sale of the business
  • Owners selling because of retirement, market timing, capital gain realization, intergenerational transfer, liquidity or other external factors
  • Entrepreneurs, partners or family owned businesses

Measurable Benefits:

  • Seasoned transaction veterans capable of achieving successful outcomes
  • Professional management of a high complex and detailed process
  • A thorough understanding of the various challenges that occur inside a company that is being sold
  • A breadth of experience which provides early recognition of critical transaction issues such that they can be dealt with in a preventative fashion, thereby increasing the probability of closing.

We apply an extremely disciplined and comprehensive approach to selling or recapitalizing your business. Once engaged, we work with you to gain a deep level of insight by identifying your company’s strengths and weaknesses; assessing your operations and management team; researching your industry; and evaluating your company’s current and future financial positions. Once we perform our initial due diligence, we map out with you a unique transaction plan and meticulously execute that plan to bring the sale of your business to a successful close. Throughout the process we maintain disciplined momentum and strict confidentiality to keep deadlines met and rumors quelled.

A sale or recapitalization of your company provides an opportunity to capture the significant wealth you have created through years of risk and hard work and to diversify that wealth into a more balanced and liquid portfolio of investments. Counsel Funding delivers the experience and market resources necessary to wisely evaluate the correct timing and structure of a transaction and the ability to execute the strategy to fully accomplish your goals.