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Larger companiesRollover equity
Should you keep a stake when you sell? How rollover works, and what sits ahead of it
How often buyers ask, how much sellers keep, when the stake pays, and what gets paid before it.
Selling
8 min read
Figures: ACG Insights, through the third quarter of 2025GF Data, full year 2024PitchBook Q2 2026Read November 12, 2026
Legend Atty · Founder, BridgeBook
Published
How often do buyers ask, and how much?
The short answer: rollover equity means you take part of your price as shares in the buyer's company instead of cash. Private equity buyers ask for it often. GF Data tracks private equity deals of $10,000,000 to $500,000,000. Through the third quarter of 2025, sellers there rolled an average of 16.9% of company value. That's up from 14.0% in 2021[1].
- Average share rolled
- 16.9%[1]Company value, through Q3 2025
- Deals with rollover
- 63.6%[2]Private equity deals, 2024
- Median hold before resale
- 6.4 yearsU.S. private equity exits, 2025[3]
A private equity fund buys companies with investors' money and sells them later. Porter Hedges, a law firm, writes that these buyers often ask for rollover as part of the price[4]. In GF Data's 2024 figures, 63.6% of private equity deals of $10,000,000 to $500,000,000 used it. The average rollover was 14.5% of the price[2].
It's grown fastest at the top. In GF Data's deals of $250,000,000 to $500,000,000, the average went from 10.6% in 2021 to 24.0% in 2025[1]. One law firm, Goodwin, counted rollover in 57%[5] of its own 2023 private equity deals of $25,000,000 to $500,000,000.
Across all buyers it's smaller. In IBBA and M&A Source's Q2 2026 survey, shares the seller kept were 4%[6] of the price in sales priced $5,000,000 to $50,000,000. Every figure here is another publisher's, named and dated, and they count different deals.
When do you get paid on it?
Usually not until the company sells again. PitchBook's median hold for U.S. private equity companies sold in 2025 was 6.4 years[3].
So plan your life on the cash at closing. The stake is money you can't spend for years, in a company you no longer control, at a price nobody knows yet. Some owners are glad to have it. Others would rather take less and be done.
What gets paid before your shares?
The buyer's debt, first. A fund buyer often borrows part of the price. The lender is paid in full at the next sale, before any shareholder sees a dollar. That makes your stake move faster than the company's value, both ways.
A made-up example: the price is $30,000,000 and you roll 16.9%, GF Data's average. That's $5,070,000 in shares and $24,930,000 in cash, before your own debt and any escrow come off. The buyer borrows $12,000,000, so the new company's shares total $18,000,000, and yours are 28.2% of them.
A made-up $5,070,000 stake at the next sale
| Next sale, against today | Company sells for | Left after the debt | Your stake | Change in your stake |
|---|---|---|---|---|
| 20% less | $24,000,000 | $12,000,000 | $3,380,000 | -33% |
| The same | $30,000,000 | $18,000,000 | $5,070,000 | No change |
| 20% more | $36,000,000 | $24,000,000 | $6,760,000 | +33% |
Made-up example. The $12,000,000 of debt is assumed to be still owed at the next sale. Nothing else is paid ahead of the shares. The share rolled is GF Data's average through the third quarter of 2025[1].
A sale at 20% less leaves your stake at $3,380,000, down 33%. If the fund adds debt during its hold, or issues shares that are paid first, the line gets longer. Ask for the order of payment in writing.
Are your shares the same as the fund's?
Not always. CLA, an accounting firm, notes that the shares you keep may be a different class from the fund's, with different rights[7].
The class decides what you're paid, in what order and with what say. Read the share terms before you agree to a percentage. The percentage of the price is only half of it.
What strings come with it?
Usually promises about competing and hiring. William Blair writes that most rollover agreements come with a non-compete, a non-solicit and a non-hire agreement[8].
A non-compete keeps you out of your industry for a set time. A non-solicit and a non-hire keep you from taking customers or staff. Ask how long each lasts, where it applies, and whether it ends if you're let go.
How is rollover taxed, in general?
Usually not at closing. William Blair writes that the part you roll over is usually not taxed at closing[8]. The tax waits until you sell the shares.
Whether it's deferred depends on how the buyer's company is set up and how the deal is built. This is general information, not tax advice. Ask your CPA before you agree to a structure, and read how an asset sale and a stock sale differ.
What to ask before you agree
Start from what's paid before your shares, then work back to the percentage.
| Term | What to ask |
|---|---|
| What's ahead | How much debt the company will carry, and any shares paid before yours. |
| Your class | Whether your shares carry the same rights as the fund's. |
| Selling them | Whether you can be made to sell, or kept from selling, and at what price. |
| If you leave | What happens to the shares if you leave or are let go. |
| Tax | Whether your rollover is tax-deferred in this structure. Your CPA answers this one. |
BridgeBook's own list. No outside source.
Rollover is one way to keep part of the company. Selling a share of it now is another: selling all of it, or part of it. And here's who buys a company your size, funds included.
What we'd look at first in your offer
With an offer that asks you to roll, a dedicated advisor starts from the cash, not the stake. Three things come first.
- The cash at closing after debt, escrow and any working capital change, and whether you'd sell for that alone.
- How much the buyer plans to borrow, and what that does to your stake if the next sale comes in low.
- The share terms, read with your attorney before the percentage is agreed.
Here's how the price becomes the wire, step by step.
Questions about rollover equity
What is rollover equity?
Part of your price kept as shares in the new company, paid out when that company sells again.
How much equity do sellers usually roll?
In GF Data's private equity deals of $10,000,000 to $500,000,000, an average of 16.9% of company value through the third quarter of 2025.
When does rollover equity pay out?
At the next sale. PitchBook's median hold for U.S. private equity companies sold in 2025 was 6.4 years.
Is rollover equity taxed at closing?
Usually not, but the rules depend on how the buyer's company is set up. Ask your CPA before you agree.
Where these numbers come from
- ACG Insights (GF Data analyst), Rollover Equity Rises as Credit Conditions Reshape the Middle Market. Through the third quarter of 2025. Read November 12, 2026.
- GF Data (ACG), GF Data Highlights Fourth Quarter, 2024. Full year 2024. Read November 12, 2026.
- PitchBook, Q2 2026 US PE Breakdown. Second quarter of 2026. Read November 12, 2026.
- Porter Hedges, Middle Market M&A Planning: What is Rollover Equity?. June 25, 2024. Read November 12, 2026.
- Goodwin, Use of Equity Rollovers Continues to Rise Amid Market Uncertainty. 2020 to 2023 deals. Read November 12, 2026.
- IBBA and M&A Source, Market Pulse Q2 2026 Highlights. Second quarter of 2026. Read November 12, 2026.
- CLA, Rollover Equity and Valuation Techniques. Undated. Read November 12, 2026.
- William Blair Private Wealth Management, Rollover Equity and Wealth Planning Considerations. September 2025. Read November 12, 2026.
Outside figures are other publishers', named and dated, and they don't feed our calculator. How we use outside figures
Keep reading
- Larger companiesSell All of It, or Part of ItSelling a majority, a minority, to your employees or to your managers, and what each leaves you.
- Larger companiesFrom Sale Price to Cash at ClosingWhat comes off the price in the letter before money reaches your bank, in the order it happens.
- Larger companiesWho Buys a Company Your SizeThe kinds of buyer for a mid-size company, how each pays, and what each does after closing.
- SellingHow to sell a businessThe steps from a first valuation to closing day, and what to get ready before buyers look.
- Larger companiesAverage Profit Margin by Company SizeWhat companies your size keep as profit, by size and by industry, from tax returns the IRS publishes.
- Larger companiesWhat a $10,000,000 Company Is WorthWhen buyers stop counting your pay as profit, and who can buy a company this size.
One important decision. Two good places to start.
Talk the stake through before you agree
Rollover is a choice about the next five to seven years. On a call, a dedicated advisor goes through the cash, the stake and what sits ahead of it. Bring your wealth advisor if you'd like.
Your exit credit comes off our success fee at closing and grows with your yearly sales: $5,000 under $5,000,000 in sales ($2,500 for your valuation report, plus $2,500 for your advisor call or for starting your listing), up to $50,000 at $100,000,000 or more.
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