Most founders walk into an exit conversation with one structure in mind. Trade sale with a full exit and cash at close, maybe an earn-out. They want to walk away in 12-24 months.
That's one of four options.
There are 3 other options one must understand properly, because each one solves a different problem. Picking the right structure for your situation can be worth more than negotiating an extra turn on the multiple.
The minority recapitalisation
A minority recap is selling 25-40% of the business while keeping operational control. A buyer, usually a PE sponsor or a family office, takes a minority stake. you de-risk and take some money off the table. The buyer gets board representation and influence on strategic decisions and you retain operational control and the day-to-day.
The market has shifted noticeably toward this model in the last 24 months. Private equity firms are increasingly taking 25-40% stakes to inject capital and operating expertise without removing founder autonomy.
For founders who want capital without giving up control, it's the structure that gives you the closest fit between the two.
This works well when you want to de-risk personally and you're not ready to leave but you want some liquidity. The right partner brings capital and capability you couldn't access alone.
This doesn’t work well when you're actually ready to leave, and a minority deal just delays the real decision.
What makes this structure interesting is the 'second bite'. The most likely buyer for the rest of your business later isn't a holding company or a strategic acquirer. It's another PE fund.
PE-to-PE secondary deals surged 51.6% year-on-year recently, and the trend is not stopping anytime soon. A minority recap with the right first-stage partner positions you for a second-stage PE fund willing to pay a significant premium for the scale you built together. That second bite is often where the real money lives.
Here are the mechanics you must understand before agreeing to anything: the buyer is taking minority equity expecting majority returns when the full exit happens. Your second bite needs to be bigger than your first to make the math work for them.
Joining a roll-up
The roll-up deal is when a consolidator buys multiple agencies in a sector, integrates them under shared infrastructure, and exits the combined entity at a higher multiple than any individual agency could command alone. You sell your agency, take some cash, and roll a portion of your consideration into equity in the platform.
The upside:
- A second bite of the apple if the platform exits successfully, often at a meaningfully higher multiple than your standalone exit.
- Access to capabilities and clients you couldn't reach alone.
- Reduced operational burden, particularly around finance, HR, and back-office functions.
The trade-offs:
- You're no longer the CEO and you will report to someone. Your operating decisions get filtered through group-level priorities that won't always align with what you'd choose for your business.
- Your equity is now in the platform, not your agency, which means your outcome depends on the platform's overall performance, not just yours.
A fair warning, it's just as important to do due diligence on the buyer. You will need to understand their full road map to achieve the group exit. Historically, close to 1 in 3 mid-market roll-ups collapsed because consolidators treated agencies like spreadsheets and stacked them instead of integrating the cultures. If the roll-up fails, your rollover equity goes to zero. You walked away from a standalone exit you could have controlled, in exchange for equity in something that didn't work.
Founders who thrive in roll-ups tend to be the ones who want to focus on the parts of the business they love (usually client work or strategy) and let go of the parts they don't. Founders who struggle are usually the ones who built their agency precisely because they wanted to be in charge.
It’s important to note that when it comes to an M&A deal the cultural fit matters more than the financial terms.
The Employee Ownership Trust route
Employee Ownership Trusts and ESOPs are getting more and more attention in agency-land.
You sell the business to a trust set up on behalf of your employees. The trust pays you the agreed value over time, usually funded from the company's future profits. The employees become the indirect owners of the business through the trust.
The economic trade-off is that the valuations are typically calculated on a fair-value basis rather than the strategic premium a trade buyer might pay. The headline number is often lower and the cash also comes over a longer period, usually 5-10 years, because it's funded from operating profit rather than the buyer's balance sheet.
But this route works when you care deeply about preserving the culture and continuity of the business beyond your departure. The team is the asset, and you want them to benefit from the value they helped create. You want to protect your people from the redundancies that often accompany a trade sale, particularly in back-office and middle management roles where buyers find their integration savings. You don't need maximum liquidity on day 1. However, this is not the route for you if you need a large cash payment up front.
Choosing between structures
The right exit structure depends on what your needs are.
Do you want maximum cash on day 1? Then go for a trade sale.
Do you want to have maximum upside with continued involvement? Then go for a minority recap or a roll-up.
Do you want maximum preservation of culture and team? Then go for an EOT.
Most just default to the structure they've heard most about, usually a trade sale, and find out later that a different structure would have served their actual goals better.
Structure matters more than headline price. A 12x deal with the wrong earn-out structure and no rollover equity can be worth materially less in practice than a 9x deal with smart governance, founder equity, and independent directors driving strategy post-close.
The headline gets the press release. The structure gets you to the bank balance you actually wanted.
Only about 4% of agencies ever exit successfully.
Of those that do, over half are sold in distress, the result of burnout, cash flow pressure, or a forced timeline. The founders who win are the ones who don't wait until they're exhausted to evaluate these structural options. They run the comparison early, while they still have leverage, energy, and time.
The work to figure out which structure fits your situation should be done 12-18 months before you'd go to market. Some structures might even require lead time to set up properly. Others work best when you have a clear growth story to sell.
At Succeed, our goal is to make M&A feel less corporate and more human. We have worked with multiple founders to help them figure out which structure is right for them. We help founders exit with clarity, protect what matters, and step into what comes next on their terms.
