Equity, not paper
A seller note is debt. Rollover is equity. Add-on buyers often want the seller to keep skin in. Selling to PE add-on platforms is the process home. Buyers lists the other rooms.
SBA 7(a) still wants a 10% change-of-ownership injection under SOP 50 10 8, and the seller note counts only on full standby and within the published limits (Source: SBA). A PE rollover stub is not automatically that injection.
Holdco rights, vesting, drag-along, and tax sit in the paper. A 20 percent roll with no vote and a long vest is a different bet than a 10 percent roll with information rights. Competing cash can still win. IBBA’s 83 percent print is a process fact, not a reason to take a thin stub. SOP 50 10 8 injection rules are a different statute. A PE stub is not automatically a 7(a) injection.
How it works still wants the holdco term sheet before exclusivity. The second-bite owner page is the process home. This page stays on the stub noun. Jason Taken will not promise a second bite.
What “second bite” actually means
It means you ride the buyer’s next exit if the holdco works. IBBA Pulse Q1 2026 said 83% of >$5 million deals had three or more offers (Source: IBBA Pulse). Competing cash can still beat a stub story. BizBuySell’s 2.75x SDE median (Source: BizBuySell) is a different room where rollover rarely appears.
A 20 percent roll with no vote and a long vest is a different bet than a 10 percent roll with information rights. Competing cash can still win. IBBA’s 83 percent print is a process fact, not a reason to take a thin stub. SOP 50 10 8 injection rules are a different statute. A PE stub is not automatically a 7(a) injection. A seller note is debt. Rollover is equity. Holdco paper decides governance. A CIM sentence is not a stockholders’ agreement.
How it works still wants the holdco term sheet before exclusivity. FAQ owns the questions. The second-bite owner is the process home. Jason Taken will not promise a second bite.
What counsel should read before you exclusive
Holdco rights, vesting, drag-along, and tax. A CIM sentence that “you will roll 20 percent” is not a stockholders’ agreement.
| Instrument | Risk | Cash timing |
|---|---|---|
| Cash at close | Buyer credit / escrow | Close |
| Seller note | Credit risk | Over time |
| Rollover equity | Equity risk | Next exit, if any |
Is rollover a second check or a second risk?
It is equity risk. You ride the buyer’s next exit if the holdco works. Holdco rights, vesting, drag-along, and tax sit in the paper counsel reads before you exclusive. A CIM sentence that “you will roll 20 percent” is not a stockholders’ agreement. Minority stubs often have limited votes. Competing cash can still beat a stub story. IBBA Pulse’s 83 percent of over-5-million deals with three or more offers is a process print, not a reason to take a thin stub.
SOP 50 10 8 has its own injection rules. Do not assume a PE stub satisfies a 7(a) 10 percent injection. A seller note is debt. Rollover is equity. How it works still wants the holdco term sheet before anyone exclusive. FAQ owns the questions. The glossary hands you to the second-bite owner, then to a confidential intro call. Jason Taken is a business broker. He will not promise a second-bite return.
If the stub is paid in preferred that the buyer can squeeze, you do not have a second bite. You have a hope. Counsel reads the waterfall before you exclusive. A CIM percent is not a waterfall.
A stub that vests only if the seller stays as president for three years is partly retention, not only equity. Name the employment piece so tax and counsel can split it. A CIM that calls the whole number “rollover” has mixed two instruments. The second-bite owner keeps the process. The seller-note glossary page keeps the debt cousin. This page stays on the stub.
What this page will not do
It will not promise a second-bite return. Jason Taken is a business broker. The glossary sends you to the owner. After the noun is straight, book a confidential intro call.