Understanding Equity Rolls for Canadian Business Owners,

As a Canadian business owner preparing to sell your business, you may encounter the term "equity roll" during negotiations, particularly when dealing with private equity firms, strategic buyers, or other sophisticated investors. An equity roll, also known as a rollover or equity rollover, refers to a transaction structure where the seller retains a portion of their ownership in the business by "rolling over" some of their equity into the new ownership structure post-sale. This allows the seller to maintain a stake in the future success of the business while receiving immediate liquidity from the sale. Understanding the forms an equity roll can take is crucial for making informed decisions during the sale process. This article explores the common structures of equity rolls, their implications, and key considerations for Canadian business owner