The Stock Buy-Sell Agreement
Our primary method for helping clients get the capital they need is through what is called a Stock Buy-Sell Agreement. Here is how it works.
The business owner agrees to sell the company's Class A shares to a group of investors for an agreed-upon amount and with a scheduled timeline to repurchase the stock. Unlike Venture or Equity Capitalists, the investors do not get involved in managing the business. And unlike a traditional loan from a bank, you do not need 20% of the capital you are looking to raise. We negotiate a mutually acceptable schedule for you to repurchase the shares over time. In some cases, as long as 20 years.
As with any transaction, there are fees. BCG charges a syndication fee of 1.5% of the net transaction amount. The investor group will charge a one-time fee of 25% of the net amount. Our fee is required upfront but goes into a trust until a commitment and term letter is secured. We do not get paid if that does not materialize. The investor group will take their fee out of the proceeds of the sale.
We are not a bank. This is not a loan. BCG works with you to structure a transaction that meets your needs and can be approved by the investors. We strongly recommend that you consult with your attorney and your accountant.
The business owner agrees to sell the company's Class A shares to a group of investors for an agreed-upon amount and with a scheduled timeline to repurchase the stock. Unlike Venture or Equity Capitalists, the investors do not get involved in managing the business. And unlike a traditional loan from a bank, you do not need 20% of the capital you are looking to raise. We negotiate a mutually acceptable schedule for you to repurchase the shares over time. In some cases, as long as 20 years.
As with any transaction, there are fees. BCG charges a syndication fee of 1.5% of the net transaction amount. The investor group will charge a one-time fee of 25% of the net amount. Our fee is required upfront but goes into a trust until a commitment and term letter is secured. We do not get paid if that does not materialize. The investor group will take their fee out of the proceeds of the sale.
We are not a bank. This is not a loan. BCG works with you to structure a transaction that meets your needs and can be approved by the investors. We strongly recommend that you consult with your attorney and your accountant.