Business ownership is how most FatFIRE wealth actually gets built, and the exit is where decades of work convert to a number. Section 1202 Qualified Small Business Stock can exclude up to $10 million of gain per shareholder from federal tax, and proceeds beyond that face the 23.8 percent top capital gains rate. Entity and structure decisions made years before a sale determine which of those applies.
This hub covers the full arc: how private businesses are valued, deal structures from asset sales to earnouts to rollover equity, succession planning, financing growth, the operating disciplines that make a company sellable, and what founders actually face after the wire hits. It is written for owners and operators who want the years of work to convert at the best multiple and the lowest tax cost, and who are already thinking about what comes next.
Business Operations & Exits
12 articlesIRR vs Interest Rate and What the Confusion Costs You
The confusion between IRR and interest rate is not a beginner's mistake. It shows up in how sophisticated investors frame capital allocation decisions, set hurdle rates, and compare deals across asset classes. Get the distinction wrong on a $10M deployment and you may optimize for a metric that flat
How a Private Equity Operating Model Creates Value
A private equity operating model is the structured framework a GP uses to improve a portfolio company's financial performance between acquisition and exit. The private equity operating model has become the primary battleground for returns: according to McKinsey's 2024 Global Private Markets Review,
How ESOP Investment Banking Defers Tax on a Business Exit
For business owners with $5M to $50M in company equity, ESOP investment banking sits at the intersection of exit planning, tax strategy, and ownership transition. The core mechanics are straightforward: an Employee Stock Ownership Plan acquires company shares, employees accumulate beneficial ownersh
How an Investment Banking Haircut Limits What You Can Borrow
An investment banking haircut is the percentage discount applied to an asset's market value when that asset is used as collateral. If your $5M equity portfolio carries a 50% haircut, your lender extends $2.5M in credit, not $5M. That gap is not arbitrary. It is a calibrated buffer against price vola
The 100-Day Plan in Private Equity After an Acquisition
The 100 day plan private equity firms execute post-close is not a formality. It is the single most reliable signal of whether a GP can actually operate a business or just buy one. For FATFIRE individuals evaluating PE funds as LPs, co-investing alongside sponsors, or running their own acquisition, u
How Tax Distributions in Private Equity Work for LPs
Tax distributions in private equity solve a specific problem: partners in a pass-through fund owe taxes on allocated income whether or not they received cash. The fund distributes capital to cover those liabilities. Get the mechanics wrong in your partnership agreement, and you either drain the fund
How the Private Equity Capital Stack Drives Your IRR
The private equity capital stack is not an administrative detail. It is the primary driver of how risk distributes, how returns compound, and how much of your gain survives taxes. Get the structure right on a $50M acquisition and you might clear a 25% IRR. Get it wrong, and the same business at the
What Happens When Private Equity Buys a Company
Private equity acquisitions follow a predictable playbook: acquire a company using a mix of equity and debt, compress costs and accelerate growth over a three-to-seven year hold, then exit at a multiple that returns capital to LPs. The mechanics are well-documented. What gets less attention is what
Apex Service Partners Private Equity: Revolutionizing the Home Services Industry
Private equity’s latest darling is reshaping how millions of Americans receive their home services, from HVAC repairs to plumbing emergencies, through a revolutionary business model that’s turning heads across the industry. Apex Service Partners, backed by substantial private equity funding, has emerged as a game-changer in the home services sector, transforming the landscape of residential […]
Private Equity Placement Fees: Cost and How to Negotiate
Private equity placement fees are payments made to intermediaries who help fund managers raise capital. They typically run 1% to 3% of total capital raised, though first-time or smaller funds can see fees as high as 5%. On a $500M fund, a 2% placement fee means $10 million paid to a placement agent
How Private Equity Drawdowns and Capital Calls Work for LPs
A private equity drawdown is the process by which a GP issues a capital call, pulling committed but undeployed LP capital into the fund to finance a specific investment or fund expense. You signed the LPA, committed $5M, and now the clock starts. Understanding exactly how that capital moves, when it
Succession Planning Quotes on Protecting Family Wealth
The best succession planning quotes don't inspire you. They pressure-test your assumptions. For founders and business owners at the $5M+ level, the real value in what Buffett, Drucker, and others said about succession isn't motivation, it's the framework underneath the words. This article extracts
Entrepreneurship: common questions
How is a small business valued for sale?
Most private businesses sell on a multiple of earnings, typically seller's discretionary earnings for smaller companies and EBITDA for larger ones, with the multiple driven by growth, margin durability, customer concentration, and how well the business runs without the owner. Recurring revenue and clean financials expand the multiple; owner dependence compresses it more than most founders expect.
Should I sell my business through an asset sale or a stock sale?
Buyers prefer asset sales for the depreciation step-up and protection from hidden liabilities; sellers prefer stock sales for capital gains treatment on the whole price and a cleaner break. The gap gets priced in negotiation, and the answer depends on entity type, since C corporation asset sales can trigger two layers of tax while stock sales avoid them.
How long before selling should I start exit planning?
Two to five years. Clean financials need trailing history, QSBS and trust strategies carry multi-year holding requirements, key-person risk takes time to engineer out, and estate moves like gifting equity work best before a sale price exists to anchor the valuation. Owners who start when a buyer appears leave both price and tax savings on the table.