# Rollover Equity: How to Lower the Cash You Need to Buy a Business

Raises.com webinar, Wednesday, September 23, 2026. Natu Myers, founder, Raises.com.
Runtime 67 minutes 10 seconds.

Verbatim transcript. Timestamps are offsets into the recording. No figure, name or
claim has been altered; the only edits are filler fragments, immediate false starts
and the spelling of proper nouns the recogniser misheard.

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**[00:00]** If you can hear me, just comment one if you can hear me.

**[00:07]** Or just say you can hear me.

**[00:10]** Okay, everybody, this is Natu Myers here from Raises.com. So take a look at this, okay? This is a headline I want you to take a look at. This is a client of ours, Cody Sechelski, closing a $2.6 million HVAC acquisition plus a roughly $1 million refinance simultaneously, so a double closing. And 25 capital providers looked at that deal, okay? 24 said no, and one funded the entire thing in two tranches within a few days. this is not our press release this is yahoo finance covering that from july 8th and here is what i want you to sit with nothing about that business changed between the 24 no and then the yes it had the same revenue same 600 000 in trailing net income it had the same owners same building same trucks what changed was the structure of the money and the piece of that structure that did the most amount of work is the one that nobody in this M&A market uses properly.

**[01:22]** And that's what I'm going to teach you today with actual numbers. This is rollover equity. So let me tell you exactly what we're going to go through in this webinar, so have you. So you can decide right now whether it's worth your lunch hour because you're going to learn what rollover equity actually is in terms of applying it and using it to raise millions of dollars and save yourself potentially millions of dollars in a business acquisition. No interest. You can save 30% of a business acquisition without any additional interest. So what exactly is it? And how do we use it to make our deals easier to close? So I'm going to tell you three reasons a seller says yes to it, and none of them is about you being more persuasive. You're going to learn what a lender reads into it and this is the part that moves credit committees see you're going to see cody's deal line by line including the three weeks before the wire and the day it nearly died and what we did about it and you're also going to learn how the interest rates because the interest rates changed recently at a time of the recording um you know what 16 can do to a deal and why rollover is worth more when interest rates are high not less and this is what happens when you structure, what happens to the actual structure. So it's not just raising the money. What happens after you close the deal and the rates move? What will happen after? So if you're buying a business or a building with the cash you need at close and the cash you need at close is not there, you're in a right webinar. So stay with me because at the end, I'm going to show you a step-by-step checklist that you can apply from this entire conversation. And watch this so that the conversation will make sense. Because at the end, for those who stayed on all the way until the end, you know, we'll give you that checklist. So while people are still coming in, and hey, to the folks who just came in, there are two things in the chat. One, tell us what you're building, or rather what you're buying, whether it's a business or a building, tell us what kind. And two, where are you with it? Are you under LOI? Are you in due diligence? Or are you still looking? Because I'll read all of these and i'll aim the questions at what's actually in the room marcus says plumbing under dana says self-storage pre-dental practice in due diligence good okay so i'll go through this and then i'll stay for questions at the end type yours when you think of it you don't have to wait so why listen to me and who am i so my name is natu myers i'm the founder at raises.com we do one thing somebody has a business or building they're looking to buy and then there's a gap between the price of the assets and the money they have we create the structure that closes that gap whether it's a fund a special purpose vehicle offering documents financial model what have you uh we build the structure and then do introductions to the capital sources that can provide it through compliant channels so i'm not going to spend too much time on boring old me but you know you can look me up online you know i've been in this business for you know about a decade uh some people that have closed similar types of transactions to the one we're going to talk about adate closed a 44 unit multi-family deal and a car wash business two car washes actually the multi-family deal closed after two of his committed investors walked out in the middle of the raise because the structure was standing properly before he left so he did capital calls and it closed successfully henry he's a first-time buyer closed a senior home care living services business in texas and he opened two more on the same structure when it closed and cody who he saw on the first slide is a deal who i'm going to open up completely he's another success story and we have many like this you know sabrina you know several others but let's just go into what we have because half of what i say about lenders comes from one of our team members uh you know who works with us Tre brown who runs capital markets at raises.com he did the deal and he ran cody's day today so what our team members do people who you know onboard us as a client they pay us for consulting services and advisory services, is we hire staff that essentially spend their time with people and call people on the phone and quote the deals and do all this.

**[06:00]** So remember, stay at the end and I'll give you the checklist and the lender question list of questions that underwriters ask about your deal and all the things that you need to be prepared for so that they don't say no. it's a piece of what we're going to talk about here so i want to describe somebody who is essentially the type of person that this is for okay um tell me in the chat if this is you so buyer a has an loi in a business that's that does around three million in revenue let's say the price is around uh yeah the price is three million he has been told he needs 10 percent in so that's like three hundred thousand dollars he's short maybe he has it maybe he's been putting maybe putting all of it emcees out his bank account maybe he doesn't have it um he needs to close on friday and he will have no money left to run a business on monday so buyer a is doing one of three things right now a he's raising the whole equity piece from friends and family so he's raising the down payment money or this 300 000 from his friends and family uh i guess they say friends family or fools unfortunately some people say that uh b he's waiting saving and hoping that the seller is still there in three months when he tries to make money from some other stuff he's working on or c quietly letting LOI expire and then tell himself he'll just go after a smaller one you know but he'll be nicked by the lack of confidence that will instill and then the frustration of the seller you know a b or c in the chat So basically, A, you raise the equity.

**[07:41]** B, you wait and save. C is you let it expire and die.

**[07:47]** Okay, mostly A and C.

**[07:50]** Yeah, every woman is almost A and C. So hold that thought. Because here's what happens to buyer A.

**[07:58]** Here's the next 90 days for buyer A. Nobody talks about this. The seller gets nervous, not because there's something wrong, but because the buyer keeps on going quiet, okay? every week he's off chasing money and every week a seller hears nothing is a week that the seller's dream to make a big bag dies because he's not able to make the capital that he was expecting right so somebody else shows up with a better offer with less money but more certain money and in the version where buyer a raises it from friends and family look at what he did he gave away a permanent piece of equity from the only asset he knows uh potentially permanent and this is a permanent decision to solve a temporary problem that he would he had with timing so it's a it's kind of like an it's kind of a down it has a downside for both parties obviously and most of the equity buyers give away is not about paying for the business it's paying for the fact that they needed the money on a tuesday and the second version which i'm going to go through it actually gets worse because it looks like it worked so buyer a gets offered bridge debt so it's like bridge loan so in one of our um one of our employees at tray in his words he says this consistently bridge runs 12 to 15 on the acquisition it's expensive and it's not cheap So the issue is that if it's not equity, then it's bridge, and bridge is not cheap.

**[09:29]** So buyer A would take it because it's the money that said yes. He just wanted to get the deal done, and then he wants to refinance it later. Tre sees where that goes. So Tre's the head of capital markets at raises.com. And Tre sees where that goes. People take bridge for two years, and he tends to refinance out because the interest rates are too high, especially now that they're increasing everything. So then they haven't earned enough to cover their call. no sinking fund inside 24 months so to refinance the equity to refinance the debt and trade calls that the debt trap in his words people are just doing it to keep the party going you keep on kicking the can down the road and in the meanwhile you're burning a lot of money paying for interest payments on your business that you're trying to make sure you acquire a super profitable business But if clients leave, you know, you'll be in the red.

**[10:23]** So imagine buying a business and it's a liability. It's a multi-million dollar liability because the loans that you took on were just giving you a small edge of profit. So this expensive layer, it didn't just cost you points, it's at a clock. Because remember, at the end of the day, Cody's deal is about how you stop the clock. So buyer B. So remember, buyer B in this case is the buyer who has the same deal, same salary, same $3 million, same bank balance, same lender appetite. But nothing about buyer B is better. The only difference is that buyer B did not treat his purchase price as one number filled with one type of money. He broke it into these layers. So this is the capital stack, right? and the way that you structure the capital stack is as follows so at the top is senior debt so a bank sba later a credit fund it's the cheapest money and it's the some people say it's the hardest to get i think it's the easiest to get in many cases but it's pretty hard to get sometimes next is an asset-based facility so trucks machinery equipment so an asset based loan uh you that you can sometimes you can put on top of it so 70 to 80 percent you can get up to 70 to 80 percent on an asset based loan so that's another way of doing it and next is a seller note so the seller can finance part of his own price so basically a seller can so for those who aren't familiar a seller notes vendor take back seller of carry, a lot of variations and synonyms, but basically the seller loans you part of the money for the acquisition and you have to pay that back, but it lowers the purchase price.

**[12:11]** So finally, the next rule is what everyone's talking about. It's what this call is about. It's about the actual rollover equity. So with rollover equity, the seller does not take all of his cash at closing. He keeps a slice of the equity in the new company after the acquisition. And look at the cost column. There's zero cash to close, and this has zero interest. So this has no interest. And below that, then you have mezzanine or preferred equity. So that's outside money. Equity investors is expensive, and it's permanent sometimes.

**[12:45]** And, you know, it's not as dilutive as common equity is. At the bottom, you have common equity. So that's you and your investors. It's the most expensive type of money that there is in this life. So under all of it, there's one line, and that's the gap, and that's where you actually have to go out and raise after every other layer is filled. Or you can use this to fill the layers, right? Every dollar you fill in a layer above is a dollar that you do not have to raise below it. Your equity gap is kind of not a fact about your deal. It's the output of how you built the stack.

**[13:17]** So let me take some time and define what an equity or rather rollover equity actually is. because everyone has heard the term and almost nobody uses it in practice and nobody talks about this. So rollover equity is essentially where the seller of a business takes part in the purchase price and not in cash but in the ownership of the company that's buying them. So instead of walking away with 100% of the price on the bank, let's say he walks away with 70% and 30% is in the new company. So here's what happens mechanically. You set up the entity that is going to own the business. That's the holding company. And the seller contributes a slice of his shares in the old company into that holding company. And in exchange, he receives units in it. So he rolled his equity over and it's called rollover equity because his ownership rolled from the old entity to the new one without passing through cash. And is everybody with me here? Can anybody everybody's still with me just making sure you guys are still awake okay good so three things that makes this true and you need all three one you need cash at close it drops exactly the value of what he rolled so 30 percent rolled on a 2.6 million dollar deal is around let's do some math it's around seven hundred and ninety eight thousand dollars that you did not have to bring to the table that's not a metaphor because it's the line in cody's sources and uses so it saved him seven hundred and ninety eight thousand dollars just because he knew about this so your knowledge can save you millions of dollars two he's also your partner kind of a passive partner though it's kind of like for those who's who are familiar funds you know i have an lp a limited partner that's like has a limited i guess say you know some of the movements of the business i'm not saying that legally it's the same but practically oftentimes they sit as a passive partner but basically he has he's your partner he owns a real piece of your company you get a share of your profits and a share of whatever it sells for later so let's say you create a roll-up which is what we've done with the Cody strategy you know we need to for roll-ups we essentially need to make sure make sure that this partner is this seller is like a long-term thing because he will probably be part of all the upside of the future roll-up you work on and three because he contributed shares rather than selling them for cash the part that he rolled is not he's usually talked to an accountant but it's usually not a taxable event at the moment it rolls his The accountant confirms it, of course.

**[16:04]** Check over the lawyer and accountant. I'm not an accountant. You know, we just work with accountants. But yours confirms is for your structure, and I'm telling you the mechanism. Because with these three questions, if any of these are answered in your head, you will never put a rollover in a deal.

**[16:24]** So Mark asks, so usually I'll save the question to the end, but this is an important one. Why would a rational seller ever agree? he is selling, he wants out. Well, I mean, there are many reasons. So, I mean, like, what I just said is, for example, tax.

**[16:40]** Cash is closed. Cash that closes is often taxed and the road portion is usually not So until it eventually sold the accountants already knows this and then he may think his business is worth 2 today if he believes you grow it and 30 percent of a bigger company is worth more at exit than it was today so cody explains this better than i do when i met him uh for example you hold a 100 million dollar business and you sell 70% for $70 million, you roll $30 million into the buyer's portfolio shares. And when the portfolio sells, you get paid a second time, usually more than the first. So this is an example, right? So unless a business is shrinking, it's growing. I mean, look at inflation. Inflation goes to assets, right? Quantitative easing and all that. And then the last reason, I guess, is price.

**[17:34]** And nobody really uses this because the seller wants a number you can't justify in cash. So a seller wants a 3.5 and essentially it can be shown as 3 in cash. And let me just go through this again. The seller wants a number you can't justify. A seller who wants 3.5 and can be shown 3 in cash will usually take the 3.5 if it's rolled. if they're thinking long-term. So the rollover is how you close the valuation gap, not just the funding gap, okay?

**[18:12]** So another common question is, what does a seller, or rather a lender read into it? So here's a sentence from my own notes on Cody's deal, and I stand behind every single word here. So a seller who rolls equity is the highest quality reference letter a lender will ever read because basically a lender so think about this right a lender is basically saying that this person knows his business better than everybody and then he agreed to keep his own money in it so the lender is like okay the person is not running away from a failing business or anything he has some vested interest i.e skin in the game right and how many people here know how valuable skin in the game is and how annoying it is right so for people who want skin in the game, you have skin in the game. And it's like saying that, Hey, I put my money where my mouth is. And so when a lender sees that they're like, okay, yeah, this is not some sort of a, you know, dying ship here. They're going to get their interest payments and everyone's going to get their money. And it matters more now than it did five years ago, because in Tre's words there before, if it was 2010, 2015, uh, you could buy a business of zero cash down. Uh, if you had net worth and back before around covid and before covid you know there was low interest there was even a zero percent interest rate era um but now lenders are want equity they want proof of funds they want cash or it's a collateral everything's harder than people expect lenders are asking for this asking for that asking for net worth on both sides of the border usually canadians used to only do this but now americans are now getting a little bit bashful too uh they're getting a little bit scared too so you know when americans get scared you know that there's a real change in the market right so 10 million dollar business the minimum equity ask is around 2 million and if you bring two uh you can turn it to equity for the transaction the bank may finance another 80 so you bring 2 million and you're asking for 8 million your eighth has to be justified in something else like whether it's a company's books or some other sponsor or some other source of money or otherwise, right? So when a lender demands an equity lender that you can't personally fund, the rollover is one of the few honest ways and get filled. So whether your specific lender credits it against your capital requirements, you know, that's like not all lenders do that.

**[20:40]** We were really lucky with the capital sources that we work with, but quite often this is possible. and the reason why is because this conversation like doesn't the reason why this is an important lesson is because most people they don't even use this option they just like they don't even mention this and it's costing you money it's costing you time and that's why many people you know their deals are not closing because they're not structuring it right they're not looking for every opportunity they're not finding good sellers they're going on biz buy sell and trying to pay 100 cash or finding somebody to pay 100 cash they're not aware of capital structure and it's costing them money.

**[21:19]** So rollover is basically a cheap, is cheap in cash and it's expensive in documents because it lives under the operating agreement. So that's the thing about it. I guess that's the cost because the operating agreements have to be, they have to reflect, like in a new ownership structure, the operating agreements have to reflect this. And if it's obviously a certain type of company, like rather a C Corp, you know, then the shareholder agreements, right? and I'll show you a deal where the rollover changed its legal form three or four times in or three times in four months and the economics never moved because the thing is like documents are important you know all the securities lawyers have gone through this and everything so type a one in the chat if this is clear and type a two if you're lost

**[22:08]** Yeah what happens if you disagree yeah so i mean i mean it's pretty it could be pretty serious if the lender if the seller disagrees like disagrees like later on or wants to exit later on unless it you have somebody has to buy them back so the way i look at it is like this has to be ideally with a seller that you have a long-term relationship with and you trust like it's not just some quick thing like you have to meet them in person and you have to know them for probably a few months and stuff at minimum because you're going, you're getting married to this person, eh? Because after you buy the business, they retain 30% passively. That means you have to grow aggressively, right? So yeah, like you have to really make sure that you're aligned on values.

**[22:51]** So now let me open up more information on this deal.

**[22:56]** So October, 2025 to July, 2026, uh, almost $4 million. dollars so Cody Sanchowski 10 years in construction 12 years before this he was sleeping on a couch uh he built a construction business rather a contracting business from nothing kind of construction as well from nothing um so basically his idea is that he had a roll-up thesis his idea was to buy family-run service businesses across Texas and the Gulf Coast and one after another under one holding company he would build a roll-up that was the strategy and he had one skill of operating and he had a good target the thing that he was missing he said he had some good cash flow but he had he didn't have cash so it's possible to be asset rich and i guess cash light you know let me just say cash light so he put down twenty thousand dollars in all the services and then he raised like nearly four million dollars so here's how the deal was designed okay 50 of the cash was in place at co-host so that was like the loan 20 roughly was the seller note so that's 532 000 three years standby and it was subordinated to the to the senior lender so standby just means that the seller earns interest but takes no payments for three years so he the idea is he in three years he gets a balloon payment okay so you have to have such financial like discipline or else somebody can go like in serious bankruptcy if you don't structure this right like imagine you have to pay somebody all this money and then plus the monthly interest payments and then you don't even have the money in the end to show for it so you got to be careful here and in 30 this is my favorite part and this is the part of the lesson 30% was rolled by the seller $798,000 of equity which kept in the company okay so this is like only going to be on this webinar and this webinar would not be recorded so this is the detail that I want you to really understand so the deal is originally sketched with a 20% rollover and our team and everyone we have to push really hard to get to 30 that cut the cash near that closed by 260 000 us dollars and it gave the lender the best reference letter that they could get the seller's own money is staying in we know we're going to get our interest payments we trust this guy okay so that's why when they flew and then they met everybody they could see the team confidence one of the i guess one of the other things of the what is it the 0.3 million dollars due at close uh this is a 300,000 due at closing 1 million came from a senior lender uh uscg and at 16 48 month amortization and interest in year one so i'm not repeating that but these were some of the things that happened so the interest rate was in the teens and this is the parts that is in the press release as the deal basically almost fell apart in the last few weeks before wire day we had a compliance difficulty that's all i'm going to say and things were very close to not closing okay it wasn't a problem with the business it wasn't a problem with the paper it was a compliance issue that was discovered and that's where most deals die but here's what our team did and trade did to save this deal trade structured a special note that helped the seller you know make sure that he got what he wanted after the deal closed and it was structured as a promissory note from the holding company to the seller so essentially there was a difficulty working with the seller and then you know to overcome that objection that the lenders didn't didn't want to work with you know our i guess um Tre head of capital market structured a deal between the seller and the company after the company gets formed in the new acquisition that helped the seller get the cash that he wanted at closing so it's sort of a technical issue and everybody wasn't as motivated as Tre like Tre believed in it, and that's why it worked out.

**[27:31]** And so essentially, the rollover equity didn't go away. It just kind of changed form because based on the company structure, it went from, I believe, it was going to be one type of company and it became another type of company. So essentially, just work with legal to make sure that the type of company and the ownership of either the units or the shares, depending on the type of company, makes sense in the context of the deal. But essentially, the principle still applies. Just look at the strategy in the top down. instead of getting confused in all the structures and here's the thing notice what the restructure did to the buyer's cash the 330 000 of sponsor equity got absorbed into the seller note and cody's own cash at close went almost to nothing because under 20 000 yeah on the session i had a few weeks ago cody paid less than 20 000 And when the deal finally closed, and then everyone got their money, and I saw money flowing everywhere, 3.4 million senior facility in the teens percentage.

**[28:34]** I mean, I know it's in the teens, so that's going to mean that somebody's going to have to refi soon, but this deal closed and this roll-up has commenced.

**[28:45]** So that's what rollover equity is when it meets a real lender. It's not just one clause. It's whatever shape keeps the seller's economics intact and the lender's committee comfortable at the same time. And keep her billing in that shape three times under a seller who kept asking, when is my money coming, this is my job. So seven months, 24 no's, one yes. First deal of a roll-up he now controls.

**[29:11]** So what does this mean and what's happening now and how can you use this? Well, let me give you something else I promised. See, the thing is that we're in a difficult spot because we're looking at interest rates, right?

**[29:26]** I'll tell you what interest rates can do to this type of deal during, before, and after. So before, as for what Tre said, our head of capital markets at raises.com, 2010 to 2015, you can buy a cash with like zero money down without a net worth at all. interest rates were cheap, lenders would lend you money for anything. In that world, a rollover was nice to have a sweetener, but not necessarily necessary. Now, interest rates are not cheap and lenders are not underwriting leverage. You know, a bridge loan can be like 12 to 15 to 16, 17. Lenders are asking for net worth equal to sometimes 20%, sometimes the entire loan. That's the environment that we're living in. So let me do some math on that 16%. So every $100,000 of senior debt at, let's say it's 15%, costs $15,000 a year in interest before you pay back a dollar of principal.

**[30:33]** So the lender underwrites you to a coverage ratio. So, trade threshold, 1.25 of the business has to throw off $112.5 for every hundred of debt service. So, every $100,000 you borrow at 16% to 15% is roughly almost $20,000 of cash flow the business has to produce every year before you see any of it in your bank accounts and profit. So, put the rollover next to that. $798,000 rolled by the seller at 0%. And if that $798,000 had senior debt instead at roughly 15%, that's about almost, yeah, it's roughly $100,000, above $100,000 a year of interest. And the business would have to earn $100,000 more there on $600,000 of net income. that it does not close. So the rollover is the reason why the coverage ratio works. And then imagine paying out hundreds of thousands of dollars or needing to generate, imagine the stress and the pressure of needing to generate hundreds of thousands of dollars just because you didn't know one term existed, right?

**[31:53]** Just because you didn't tell somebody, oh, let's do rollover equity. You lose hundreds of thousands of dollars. So this webinar essentially saved you hundreds of thousands of dollars if you weren't familiar with it. So here's the point. And it's opposite of what most people assume. High rates don't make a rollover less attractive. It makes it more valuable because the higher the rate on the money you would otherwise borrow, the more every dollar counts and the more every dollar as a seller rolls in is worth to you. So at 4%, a rollover saves you very little. At 50%, it saves you an entire deal. It saves you like a ton of revenue. so interest only in day one or rather year one 400 uh with 14,800 a month instead of about 37 that's the difference between a coverage ratio that works during integration when clients leave and a new owner is learning and one does not nobody offers that in the first draft you have to know to ask and the three-year standby on the seller note here is and here is why three here's why three and not one a one-year standby on a 16 senior loan is a default in month 13 so remember the standby is basically taking a break before you start paying back interest on a loan right some people and then you do the balloon payment after so if they lose a one-year standby They'll default in month 13.

**[33:23]** Three years gives the operator some time to pull cash out of the business and refinance in lower interest in lower rates And then if you have lower rates you know then you can save some money and then be able to afford to pay the balloon payment it sounds stressful I know so the standby is what this is what lets the senior lender agreed to be in the first position obviously and to do the deal because if these if the senior lender sees that you can't afford the seller carry then you're not going to make money on the deal to begin with right so what happens to this structure once you have closed, once the rates move.

**[34:02]** So the layers that carry our rates are the layers that move. So the senior at 16, 15, 16-ish, the seller has a note at around 10, the ruled equity carries nothing. It doesn't care what the Fed does. So the rollover equity doesn't care and doesn't care directly about what the Fed does or what the interest rates in the banks do. They're more based on the reaction of what's needed. right because rollover equity is not a loan it's a special type of equity that is future looking it's almost like a safe like a i can't remember the acronym secure like secure agreement of future equity i can't remember what the secure the s meant but basically you're agreeing for a future equity in the post deal acquisition yet you have to keep in mind and financially project all the money that you have to pay for that 30 equity if rates come down then 16 the 16 is the layer that you refinance, right? You run a business for 12 months, you build a track record under your own name, and you take that file to a lender who priced it as a seasoned business instead of a first-time buyer. The expensive money was a bridge to being financeable. See, Tre on our team here, the pattern, he did a similar deal just in Vancouver as well. De-leverage from the company's own revenue, then refinance the expensive layer out. The seller has a balloon payment, and that balloon is a natural moment to take it out as well so if the rates go up then the rolled layer is the only layer that didn't just get more expensive right the interest only year and the standby is what protect your coverage while everything else gets more expensive so it kind of gives you this it's kind of like locking in a uh an interest rate for three years because you're paying it back in three years because there's like a three-year standby so let's say for example like you have a deal they do roll over equity like let's say 10 percent uh you know and then you don't you don't pay anyone back or rather the seller carry um well the road layer in general and then they don't pay anything back for five years uh then the interest rates don't change because it's like already locked in for that amount of time that's all i'm saying here okay so somebody in the chat is probably going to tell me rates are going to go up or go down but nobody really knows the short version is that what we what we have is what we get and really know what's happening right now right so let me be straight about you what i just explained because i don't want anyone leaving a false confidence i told you exactly what to do talk about rollover equity break things down to layers try to get a rollover in there and the notes about timing and things like that, get a standby so you have some time to pay back the, you know, to pay back things, okay, for sellers, okay, so you need some time, and make sure that you just have a serious financial structure for this, and I didn't even touch securities, because the moment you take away money from somebody who's not you know, some people can say that you're selling securities and what have you so you just have to have a legal team that makes sure that to review everything so before anything else i want to give you something no straight streets or sorry no um strings or anything so in the screenshot here you see like here's a checklist and another line guideline of um you know i want you to take a screenshot so this is a checklist of the things that you need to do to have proper rollover equity and it's a lender question list as well.

**[37:48]** So there are tons of you here and I can't chase anybody, but here's a favor. Message me or rather message the thing, say you want it. Just let me just see if there's demand here. I'll make sure that after this webinar, you guys get it, okay? But it's only for those that are on the call. So before the next part, I want your permission, okay? I'm not interested in pitching our services if somebody doesn't want to be pitched. say one if you're if you're interested in hearing what we have to offer just type a one in the chat okay a lot of you okay so okay let's get into it what i've given you so far it gets you it gets you a map okay there's a thing that we need to do that gets you to structure itself and obviously everything you know so that you're able to actually close these deals So Cody's deal is what it looks like when it gets done and it costs money.

**[38:48]** So here's what you actually want, right? A seller that stops getting nervous because your capital that you're bringing looks real. You want a lender or a funder of any kind that reads your file and doesn't send it back or gives you the runaround. You want an amount of cash at closing. you want real term sheets with a sense of urgency and a sense of confidence that's not something flaky or you don't get like some story about how it doesn't work and you don't get like told all these tales about oh this oh that you need that you need that you can see things actually moving in a in a way that actually shows that things are moving forward you know without any false confidence i know the feeling i know what it looks like i manage a team and what's funny is that my team is closing deals i don't really close any deals i really just manage it and i've I've seen the feeling of how it's like when things are actually progressing.

**[39:39]** I've seen things not progress too and go into the netherworld, but I've also seen things progress.

**[39:49]** And what you want to avoid is wasting your time.

**[39:54]** Giving away permanent equity, paying too much interest, you know, offering terms that don't make sense. if you don't have like if you do a rollover equity deal or you do some sort of like loan make sure that you pay off things in the right order so that you can afford to actually like run the company that you buy these are the things that can kill deals so we build the structure the funder the spv offering documents operating agreements everything we create the structure so that it's financials they're the legal side and then there's the marketing part of it where we reach out to potential funders and we build it so it holds up when counsel reads it. Because lawyers and dealmakers are going to fly to you to see if what you have is real. And what I'll do is, I mean, I'll tell you right now, here are prices on the screen.

**[40:46]** And I'll just use this from our pricing page, okay?

**[40:50]** And for those, there are a lot of people here. Some people here, you know, they want to raise money. and the issue with them is that they have no idea what they're doing they don't have a deal define a deal know what industry you're working in just have something that you're working in if you're somebody you're a professional or you're a business owner and you want to buy businesses and you know the types of businesses you want to buy you know then this is this calls for you so you know you can you can literally just purchase right on the screen you've already been vetted and analyzed, you know, or you can simply just book a call to learn more.

**[41:24]** If you're somebody, you have some of the legal documents ready, but you don't have the financial documents ready, you know, but you don't really know how to do the underwriting or you don't really know how to do a deal because, you know, the AI is great, but from people that actually have closed a deal, how do we actually close a deal? You know, this is for you, for those who have every, all the structures ready. Maybe you already have a fund, maybe you've already closed a deal before, you know, but your network is tapped out. We do have a marketing engine where we can start doing the outreach and reaching out to prospective funders.

**[41:56]** Then we can start talking as well.

**[42:00]** Let's say that you're something in between where,

**[42:03]** Cause the issue is some people, they have the legal documents. Some people have the financial documents and some people, they don't have the pitch check and the marketing, but then they have investors. They need to pitch check in the marketing. Sometimes we have that. Sometimes we have people with the pitch check and marketing documents. We have people with the financial documents. We don't have people who know the legal structure, nor they, you know, they don't have that. And we can help with that. We have people that have the, you see all the permutations. You know, there's some people that they have the, they have everything except they don't know how to do an underwriting. We can do that. So basically the preparation and then the outreach. Some people have all the preparation.

**[42:40]** They need outreach. We can do that. The idea is that we do two main things of the main structure is like to structure the documents and then to start doing prospective outreach. Sort of like a warm relationships plus a marketing agency. Because the thing is, if you're a know-it-all and you know everything and you just need investors, that's good. really we just reach out using our marketing agency that can get you appointments with prospective funders if you already have all your funds and all your documents and then for those who are usually the majority who don't have a structure and who need to do outreach to prospective investors and who need a structure that's usually the easiest thing that we can do it's really easy for us to do it we've done it before and we've closed millions of dollars cents a million dollar deals uh in the last six years of our of our business so it's something that we can do all day long. So essentially, let's take a look. You know, you know, you can purchase and then you'll be in touch with Tre. Tre is, his information is right below. Tre is the head of Capital Markets, or you can book a call if you have last questions. There's really no obligation here. And if it's a fit, it's a fit. If it's not, it's not. If it can't help you, like, we'll let you know even before you have a call um we do this for a living and deal making is just part of life okay marcus's books okay marcus see you then thursday oh and yeah i guess i guess as we're here yeah this is the q a period so any questions feel free so you're asking whether it's a call it's a sales call it's a diagnostic so i mean there's there are two parts of it one is diagnostics one is sales it's like if we can we have to diagnose to see if we can actually do your do the deal and if we can't then we just part ways and give you alternatives if we can then we then we sell you yes because we sell only people that we can we can actually close a deal with are there any upfront fees yeah like again like price so it's really as high as um so about four thousand for the first month and then two thousand per month uh but for this webinar we're actually doing a discount that you can see this screen you know the first month is really just two thousand dollars for the first month and then that gets you the legal structure the financial performa projections uh the marketing package okay so somebody said, uh, so I guess this person says rates are coming down. So they'll wait.

**[45:24]** Um, so a few things, you, you do not control when the rates come down as we know, right? So the seller and you know, waiting on deal, the seller may not be there. If you keep on waiting. Cody's seller asked when my money is coming every week for two months. Sellers don't wait for the Fed. They just want their money. The next thing is like your blended cost is a function of the capital stack, not a base rate. So Cody closed at 16% senior and the deal works because the roll over and the standby, remember the standby, the thing where you wait several years before you pay out a balloon payment instead of pay monthly interest. So the standby and the interest only year did most of the work on that deal. So like if you're waiting for the base rate to fix your deal, then you're you're you could be waiting on a wrong variable.

**[46:23]** Sometimes this is kind of like saying I want to go to the gym when I when I'm skinny or I want to start eating well when I'm skinny or whatever. It's like saying I want to start making money when I start making money. So sometimes you just have to go in with the confidence in you believing the deal will close and you believing you'll figure it out and then go from there sometimes.

**[46:51]** So, you know, sometimes like because the thing is, like if the rates do come down, the buyer who already closed the refinances already closed. I mean, they can refinance the expensive layer and keep the business. So in other words, like the buyer who is waiting to start a search over in a new market, you know, every other buyer also got cheaper money. So they may actually not need you. Maybe they'll find because you have to remember, it's not just easier for you to buy a business. It's easier for probably a seller to sell the business, too, because more buyers are going to enter the market with less skills because the less interest, the lower the interest rates, the lower margin or the higher margin of error, the more bad entrepreneurs or less skilled entrepreneurs are going to enter the market.

**[47:38]** So as Jack says, their net worth is too low and they know it.

**[47:45]** Yeah, I mean, that's a common call. This one hits and this one, this is facing reality. So thanks for facing reality. So but then there's a solution here because we've closed a deal like this. but see, I'm not anti low net worth. I'm just antsy. I didn't see it coming. So I don't want people to come, you know, work with us or try to do a deal and then they don't know what's coming down the pipeline. So I'll let you know now.

**[48:09]** There's always hope. And one of the things is like you syndicate it. So we build a structure and you syndicate of equity, but in the easier way is really just finding somebody who has that net worth and then they're a partner and you split cash flows. There's no workaround and both are how deals get done in this market.

**[48:30]** So, okay, Clyde says,

**[48:38]** That is, wait, Clyde says,

**[48:42]** They'll take the bridge and refi later.

**[48:45]** Yeah, that's fine, but just be careful because sometimes it can become a debt trap. It can work. There's nothing wrong with this, taking a bridge loan and refining out later. There's nothing wrong with this.

**[48:57]** So the only issue, the only thing you have to watch out for is you have to make sure you know what the refinance will actually look like. Because the thing is, what coverage the takeout lender needs and what the business has to be doing in 24 months for that to happen. It's like, that's what you have to know. So if you can't answer that before you sign a bridge, you're not refinancing, you're just kicking the can down the street. So just be careful of that. But yeah, you can definitely do that. It just needs really good underwriting.

**[49:29]** Sam says, bring them on the call. Somebody needs to talk to their partner.

**[49:42]** Yeah, so yeah, just like, because if you book a call, there's a guest feature. So just add them as a guest.

**[49:51]** Jennifer says they already have a lawyer. Good. Keep them.

**[49:56]** I mean, the lawyer paper is a deal. I mean, the reality, too, is like, I mean, your lawyers, like, if you have the money to pay the lawyers, keep on paying them, you know. Thing is, like, lawyers are meant to protect you from going to jail. They're not meant to make you millions of dollars. They're meant to prevent you from losing millions of dollars and going to jail. So for the downside, lawyers are good, but for the upside, you need somebody that can raise you some money, right? So somebody has to decide what the structure should be before there anything on paper and that sits upstream of the lawyer So Cody paper changed three times The lawyer drafted all three If you have 50 to 100K to pay for a lawyer you know without guarantee of raising anything, you could.

**[50:33]** You know, but, you know, if you want to actually raise some money as well, then let us know. Well, that's good. You need both. You know, we have a way of doing it, so that's more lean, but that's important.

**[50:45]** Okay, Mike says, $20,000. What was the use of funds of the $20,000 example?

**[51:01]** Yeah, so there are a few things here.

**[51:05]** So Cody's deal. So we charge him like total. I think he paid like around 8 to 10-inch K off pocket for our services to obviously help him negotiate and actually close the deal. Because we closed the deal for him, and then that was our cost. And then we made some money as well on the back end.

**[51:28]** $300,000 got absorbed. Because Cody's deal, the sponsor cash was needed. He needed $350,000 at first. But then that got absorbed into the seller's instruments when we restructured the stack three weeks before wire. so his own cash of clothes went to almost nothing um i think it was really just the due diligence fees from the lender because a lot of the way a lot of these lenders work and we're working on being like this the way the way a lot of these lenders work is they have sort of a um the way these lenders work is they have sort of a white label um they have like a fund where so basically a lot of them are not investors they just have like a secondary company that's a fund and then they act as investment bankers to get people to agree to their fund strategy, which is usually some sort of credit fund.

**[52:18]** And then they originate deals and try to fund them and match them to their own fund. But because funds have so much governance, it's almost as if it's another investor. But anyway, long story short, they literally just paid for due diligence fees and paid for our fees, and that was pretty much it. So it was total below $20K. Maybe it was like $17K or something, or $20K.

**[52:42]** And it was paid over in chunks. It was paid like, you know, 3K per month or whatever. It wasn't like upfront.

**[52:49]** So somebody says they'll wait till they're under LOI.

**[52:54]** Yeah, then you're choosing your capital structure inside your due diligence window. So I don't think, don't come to us when you're under LOI. Come to us when you know what you want to buy.

**[53:05]** If you know what types of deals you want to acquire. So that's when you should come to us.

**[53:12]** So, you're choosing your capital structure inside a diligence window and that's like kind of the worst two weeks of the year to do it. The seller is running, I mean the clock is running, the seller is watching rather, the law is building. So, Cody's structure was built for months before the wire. We worked with him for months. And the buyers who move fastest are the ones that already have been built when a deal shows up.

**[53:36]** Walter says he paid for help like this before and got nothing. Yeah, I believe you. And not everyone in the space is honest. Trust me, I know probably seven or six people that paid a firm. I guess DM me privately if you want to know the firm. But they paid a firm $200,000 or $100,000, and nothing happened. Because the firm, they were registered by FINRA. And, you know, like I know somebody who used to work in the FBI that's actively trying to litigate them and get them arrested.

**[54:05]** And I've seen a lot of litigation of this. They've taken hundreds of thousands of dollars from people, and we're familiar with firms like this. Okay, so this is something we're familiar with.

**[54:16]** Yeah, so the thing with this is, yeah, I completely believe you. So, yeah, that's pretty much it. Like, I don't know what to tell you. So, I'm sad to hear that.

**[54:31]** So, anyways, so, I guess I really have a good answer for you. So, you know, they got nothing. I mean, you can either continue to get nothing and, you know, just stay and just give up, or you can continue to close a deal. So what's it going to be?

**[54:48]** So John says, what's the tax point about? So I said, like, usually, so I'm not an accountant, but usually these things are not taxable events, eh? So I want to be precise because it depends on how the rollover is structured and what entity you're rolling over into. So for those who are just jumping on, if you want to raise equity, right, you want to raise equity or rather you want to buy a business, you can instead of like, let's say you want to buy a $10 million business. You do rollover equity. They agree to the seller agrees to hold the equity of the business. And you only buy like 70 percent of business. So you only raise 7 million to buy the business. The other 3 million can be held. The 3 million can be saved and they can have the other 30 percent.

**[55:32]** And then let's say you want to do a roll-up and you want to build into like a new entity after the acquisition is done. You know, they can grow with you. And that's really good if you're not super confident or if you're kind of like really stretched out on capital and you really want some extra help. And you're working with a seller that you have a relationship with. And that could be something that could help you.

**[55:52]** So with that context, for those who don't understand it, yeah, it just depends on how it's structured. basically the seller will have an accountants probably and um don't promise them the tax outcome up front just say that uh you know say like offer it as an opportunity when you're sure you know but then sell them on the opportunity when you're sure when the accountant says so say that there's a way there may be a way to do it and then let the accountants confirm it so don't over promise but just say that hey we may have a way of doing it oh this is such a good question so jonathan asks um if rollover accounts has their equity contribution with the bank so it really depends so on Cody's deal the lender's own approval memo described the seller as keeping 30% so they underwrote with that in view other lenders will not credit it some credit part of it so that's exactly what like if you book a call that's exactly what we'll walk you through because it really depends on the deal and it really can affect the deal closing or not so it's pretty serious hey so take that really seriously okay so somebody's asking about the seller's information so i'm not going to discuss the seller's personal situation or anything what i would say is that uh the issue is on the lender side you know not in the business so we fix the structure and that's the lesson people look for deal killers but you have to be creative so yeah feel free to talk with us on the phone if you have questions because some of this stuff is actually private i can't really share all that information so a couple of things for people who are still here so if you're still here um if you're the one who likes to move first you're early on this most buyers have not worked out that rollover is a pricing tool it's not just a funding tool and it is worth millions of dollars tens of thousands of and it could save you and this is an edge and edges do not last if you're one of the people that needs to see somebody else do it look at all of like some of our past clients you know ad a henry cody sabrina many of them they did this with structures right and they knew the structures going in so that they saved money and they raised more money while risking less money and structure it so that the money came out of the business at the right time based on the interest rate and everything so um the entire point of doing this properly is that you put in less and keep more of what you brought right so cody put in almost nothing and he controls the platform his structure is not the risk so anybody else anybody else have any questions i guess we have we have a few but we have to start wrapping this up okay and i'm just going to go through some common questions that you know i get a lot i've been doing this for years so tons of questions uh one is like okay let me see the contract let me see something written so as soon as you book the call you'll see what's written but basically it just tells you in very simple English you're going to get several legal documents that will prepare you to raise equity you're going to get several like in case you need to raise equity you're going to get several financial documents that enable you to see if the transaction is worth your time you know and to be and it will be presented to lenders so you get a certain amount of underwriting so ideally minimum two underwritings every single week if needed, you know, for different lenders.

**[59:14]** So we move really quick on that. And, you know, who are the investors we reach out to? So the types of investors we reach out to are, you know, either private equity firms, private lenders or family offices. Like it's pretty simple. Some of these things are very simple and straightforward. So they don't need to be overcomplicated. So can you see people that we worked with yeah i mean i got tons so just look around you know we have all the people we worked with all over this uh show and uh you write below this video right on the i give people a call you'll see on the next page after um so in a nutshell again what you get so flagship package usually it's 4k for the first month and then cheaper thereafter but what we do is we prepare all the legal, financial, and marketing documents for your raise to buy a business so that it's compliant.

**[60:08]** And then we assist in the outreach. So for this particular offer, we're doing about 400 meetings per month. I guess the first month starts after we prepare the package, and we do the outreach from there.

**[60:23]** So let's say it's like, okay, people always ask, hey, do we help with the prep or do we help with raising capital? It's really both. You have to understand, people we go to, they won't look at a deal if it's not prepared properly. They really won't. And I'm not just saying that to try to retrofit something you don't need. It's the truth. You know, go to them, and then they'll tell you what they need, and then they wouldn't look at you seriously unless, you know, you send them proper underwriting. That's just the way it works.

**[60:50]** So you want to see – so examples of decks, performance, documents. Yeah, just book a call, and then on the next page, you'll see examples, okay? So all the examples are there.

**[61:04]** How long does it take you to set up your deal? So it takes, you could take, really it takes, like, it's really fast. It takes, like, honestly, like two days, but we say two weeks because we like to have a lot of time to be able to go back and forth several times and then have lawyers manually approve everything. Because lawyers have to be liable to, you know, what is being built so that everything can be approved.

**[61:25]** Is this SEC compliant? How do you communicate safe? Well, we work with securities attorneys and everything is built around establishing exemptions and to make sure that when you buy a business with somebody that, you know, the offering is completely compliant. You know, regulation D 506C usually if there's equity needed, if there's no equity needed, then really is just a commercial loan transaction and we make sure that those are compliant as well.

**[61:48]** Will you find investors for me? I mean, partially, I mean, it depends on what type of investor they are. So, you know, on the debt side, yeah, all day long we could broker everything. But on the equity side, we have to be careful because of compliance. So we work through a network of registered broker-dealers who do some of the more detailed selling because we're just supposed to make sure that you're the one selling the deal to equity investors. But what we'll do is make sure that you get in meetings with them compliantly.

**[62:15]** Why not just do it myself? Because, I mean, if you do it yourself, you can totally do it yourself. Just that it will be way slower and way more expensive because you have to pay lawyers and explain everything to them, and then you have to pay financial analysts and explain everything to them, and then you have to pay marketers and then explain everything to them, and then you have to go out to find investors with a network that you don't have.

**[62:38]** So what actually happens on this call? Oh, yeah, really the point is really just to know what type of deal you're working in, to confirm that if you're in the ICP of the types of deals that we can even help you know, buy, and then if you are, you know, then we will onboard you to our platform. I mean, it's pretty straightforward, right?

**[62:55]** You have a hard closing date. Do you work to a deadline? So the way we work is that it's really just best efforts here. So what I will guarantee in terms of your timeline is that if you do not take every action you can to get to your deadline, you're not going to get to it. That's my only guarantee when it comes to the deadline. We do guarantee, you know, minimum four meetings per month after the formation is filed with investors and funders that can fund, you know, potentially up to half of any debt need or more. And depending on how the deal is structured, that could take care of the whole deal. So if you want to take care of the whole deal, you know, that's the quickest way. I'll be really honest with you. There's no glory in trying to do something that doesn't work.

**[63:35]** But if it's equity, then that as well. It's really you get certain amount of means on the equity side as well through compliant channels. Are there any add-on fees, success fees, or percentages of raise, anything like that yeah i mean yeah there really are but we get paid uh you know both from you and from the lender side or the funder side as well so you know it's a really a one-off uh situation based on the structure uh what's the minimum deal size so minimum deal size really is a few hundred thousand could be a minimum and in the maximum there's really no limit but in practice we see in a low eight figure range that's the maximum um just in terms of something we get done do I need to renew every month or year do I need to depend on raises.com I mean you don't really need to most people work with us because they want to not because they need to so you don't really need to we make sure that everything is on your name and the deal is structured in your name I want to find a deal first before I join raises.com yeah well I noticed that like if you if you're so far away from finding a deal and it's just talk we haven't actually been able to you know get a serious conversation done with somebody who doesn't have the type of deal so it doesn't have to be like a specific deal but even the type of deal that they want to work with uh or at least one so you know have a very clear vision or ideally a type of deal but clear vision basically before loi but not after loi but then not before your idea of what business you want to buy that's a sweet spot and then we have more time to get ready so we can start preparing the deal to raise capital. How do we how do I know it will work? Are there any guarantees? Again, I guarantee that if you don't take every action you take to get this done, you will not get it done in a time frame that you want. But again, we do have, you know, there's a debt guarantee, you know, minimum, you know, at least 50% loans, the cost of this value and debt will be raised if there's, you know, US assets attached to us, particularly in a real estate class, to the business that you're buying. And, you know, the four appointments per week, or sorry, per month rather, sorry, per month not to get everyone excited.

**[65:38]** You know, industry agnostic after the structure is prepared.

**[65:47]** Okay, so I think I went through some comment questions. So yeah, I'm really going over time so I really have to start to wind it down to respect your time. So this has been an awesome session. So I appreciate every one of you giving me this in the middle of this Wednesday. So, uh, so here's what I want you to do everybody. I want you to, um, make sure you go below, uh, you book a time, or if you want to go ahead and make the purchase, make the purchase, uh, you'll be greeted by an onboarding call. And, um, you know, from there, what we do is that we structure the deal usually in the, in a two week period or less, you know, make sure that everything's structured in a two week period or less. if your financials are not ready we finish them so that it's ready for your target acquisitions if the legal setup isn't ready for your spv and the new acquisition holding company that we set that up as well and then if the marketing documents or even marketing efforts aren't ready that's what we do it takes us a while to prepare for to run ads if you want to run ads and that's a whole another thing we can get into but um yeah so good luck with all of your deals good luck with everybody all of your deals so make sure you book a call and we'll see you on the other side okay cheers