Multiple Bites of the Apple: How Business Owners Are Cashing in Beyond the Sale

The term “second bite of the apple” often comes up in conversations about business sales, especially when a selling owner stays on post-transaction to benefit from future company growth. But what if it’s possible to get more than just a second bite? As business acquisitions evolve, more entrepreneurs are securing multiple opportunities to profit.

Real-World Examples of Success

While hard data remains elusive, stories from the field highlight how this strategy can unfold. These are ALL true sell-side stories where one or more of our Florida CFO Group Partners served as fractional CFOs to help the owners navigate through the sell-side transaction.  For instance, two friends sold their business to private equity, remained on to run the company, and ended up with three or four opportunities to cash in. Staying engaged as a key player can be a fruitful way to maximize a payout.

Case Study #1 - The Roofing Business Story

Take the recent acquisition of a roofing company. The selling shareholder and management team decided to stay on and continue running the business. Now, they’re not just maintaining operations; they’re leading a strategic rollup of similar companies for the private equity firm that acquired them. During a recent conversation, the excitement was palpable—they are well-positioned for future bites of the apple as they grow the enterprise.

Case Study #2 - The Exterminating Business Story

In another case, the owner of a pest control and exterminating business sold it to a private equity firm but chose to stay on as an active leader. With their guidance and strategic private equity support, the company has executed several acquisitions, aiming for substantial EBITDA growth. Their long-term plan includes selling the expanded entity, offering the potential for multiple lucrative paydays.

Current Trends in Business Acquisitions

This trend reflects a shift in how private equity firms and other buyers view post-sale leadership. Another acquisition that we are working on will have the same structure: the selling shareholder and management team will remain to run the company. It’s becoming increasingly common for Buyers to incentivize former owners to stay on, capitalize on their expertise and give them opportunities to earn additional returns as the business scales.

The Appeal of a Bigger Payday

For many entrepreneurs, the allure of this second or even third bite is rooted in the chance to benefit from future company growth, especially if the new majority owner injects capital, operational expertise, or strategic direction. If things go as planned, the business could grow significantly, and that minority interest could become more valuable. However, success stories often make headlines, while less favorable outcomes remain shrouded in confidentiality.

Limited Data and Case Study Gaps

One of the biggest challenges in evaluating the true effectiveness of the second bite strategy is the lack of publicly available data. Many transactions of this nature are private and involve non-disclosure agreements. While anecdotal evidence from private equity and investment circles suggests that some owners indeed walk away with a bigger payday, definitive statistics are hard to come by.

The Takeaway

It’s clear that the idea of a “second bite of the apple” is evolving into a more extended feast for entrepreneurs who stay actively involved. These scenarios underline the importance of strategic planning and a willingness to commit long-term to the business post-sale. With private equity firms and other Buyers increasingly using this approach, entrepreneurs have a unique opportunity to capitalize on their expertise while remaining invested in the future of the business.

Join the Discussion

Have you experienced a 'second bite of the apple' or helped structure deals like this? Share your story or suggest resources to illuminate this growing trend.

Authors

Anna Reyes Agnew, MBA, CTP is a Partner at the Florida CFO Group, a Certified Treasury Professional, and multi-lingual. As an Operational CFO with over 15 years of CFO experience in 29+ industries, Anna's hands-on, collaborative, results-oriented approach has driven success in both corporate and consulting roles for public and privately held companies of varying sizes, from start-ups to multi-billion-dollar enterprises. You can also visit Anna’s LinkedIn Profile for more information.

Barry Brover is a distinguished Partner at the Florida CFO Group and a financial executive with a proven track record of significant accomplishments and leadership skills in a growing private or public company and had led numerous acquisitions. Leveraging his deep financial and operational experience and knowledge of retail, wholesale and supply chain, and education technology, he is an asset to any company. Check out his LinkedIn profile.

Wayne Kalish, MBA, CPA, is a seasoned financial executive specializing in organizational growth, M&A, and financial consulting. With extensive experience in capital markets, treasury management, and SEC reporting, Wayne has led transformative initiatives, including Darden Restaurants’ $1.4 billion Rare Hospitality acquisition and the sale of a 30-year-old manufacturing business to private equity. Wayne is a trusted advisor to small and mid-sized companies and a sought-after speaker on M&A at leading academic institutions. Check out his LinkedIn profile.

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