Acquisitions
Seller's Net Proceeds Calculator
The gap between the number in the press release and the number in your bank account. Debt comes off, advisers take their percentage, some of the price stays behind as rollover equity, some sits in escrow for a year or more, and then the government takes a share of the gain. Owners are routinely surprised by how little of a headline price is actually theirs.
Inputs
- Headline price
- Debt repaid at close
- Transaction / banker fees
- Legal and accounting costs
- Escrow held back
- Rollover equity
- Your tax basis in the business
- Capital gains rate
How to use this calculator
- Enter the headline price (the number that would go in the announcement) and the debt that gets repaid out of it at closing.
- Add your advisory fee percentage and your legal and accounting costs. On a lower-middle-market deal the banker's fee alone is commonly 3-6% of the price.
- Set the escrow percentage held back against indemnity claims and the percentage of the price you are rolling into equity of the new entity. Neither of those reaches your account at closing.
- Enter your tax basis and a capital gains rate. Basis is what you have already been taxed on. A founder who started with nothing often has a basis near zero, which makes almost the whole price taxable.
- Read the rows top to bottom. Every line is a real deduction someone will explain to you separately, which is why the total is so often a surprise.
- Take this number, not the headline, into any conversation about what you will do after the sale. Take the actual deal structure to a tax adviser too, because the tax line here is an approximation, not a filing.
What each term means
- Headline price
- The announced enterprise value. It is the number people repeat and almost never the number the seller receives.
- Enterprise value vs equity value
- Enterprise value covers the whole business; equity value is what is left for the owners after debt is repaid. The gap is the first surprise in most deals.
- Transaction fees
- The investment banker or broker's success fee, usually a percentage of the price and often with a minimum.
- Escrow / holdback
- Part of the price held by a third party for twelve to twenty-four months to cover breaches of the seller's representations. You get it if no claims land.
- Rollover equity
- A slice of the price taken as shares in the buyer's new entity instead of cash. It can be worth more later or nothing at all. It is a second investment, not a payment.
- Tax basis
- Your investment in the business for tax purposes. Gain is proceeds minus basis, so a low basis means a large taxable gain.
- Capital gains tax
- The federal rate on the gain from selling a long-held asset, lower than ordinary income rates. State tax, the 3.8% net investment income tax, and recapture are all on top and are not in this tool.
- Recapture
- Part of the gain taxed at ordinary rates rather than capital gains, because you previously deducted depreciation on the assets being sold.
- Net proceeds
- What is actually yours after every deduction and the tax: the only number that should drive your plans.
Educational disclaimer: Outputs are simplified educational estimates built from the numbers you enter — they are not financial, legal, tax, or investment advice, and real decisions deserve verified figures and qualified professionals.