Hidden Danger of Rolling Equity
“Matt Matros is the founder of Protein Bar, a fast-growing smoothie company. In 2012 he sold to a private equity group for $44 million and rolled 40% of his equity,” shares Sam Thompson a Minneapolis business broker and the president of M&A firm Transitions In Business. “This episode will share Matt’s story and the risk he took in rolling his equity. He’ll share what you need to be aware of when selling to a financial buyer.”
Matt Matros built Protein Bar from a single smoothie shop into a fast-growing chain. In 2012 private equity firm L Catterton came knocking with a deal valuing his company at $44 million. Matt decided to roll 40% of his equity, expecting it to grow even more.
In this episode of Built to Sell Radio, you discover how to:
- Navigate the risks of rolling equity: Learn why Matt now regrets rolling equity and how the liquidity preference given to investors could leave him with nothing.
- Understand the implications of a liquidity preference: Find out how the investor’s preference means they get paid first and why this can wipe out the value of your remaining equity.
- Avoid common pitfalls in private equity deals: Get insight into the clauses and terms you need to watch out for when considering rolling equity.
Listen to the episode to hear Matt’s eye-opening story and his advice on how to protect yourself when selling to private equity.