I’m looking at a business where the top 3 customers account for 45% of the revenue. I would only move forward if the seller would agree to at least 50% seller financing that’s tied to performance of these customers for the next 5 years, where each year a portion of seller financing may or may not be forgivable depending on whether any of the top customers are still buying at similar levels. Any advice on how to approach the structure?
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
Tying performance to revenue would present the issue that one can always retain the revenue from a customer by sacrificing margin. I would be tying performance to gross margin, rather than revenue.