Net proceeds calculator
A signed LOI with a $23M enterprise value does not put $23M in your bank on wire day. The number that lands is the residue after debt, working-capital peg, escrow, rollover, transaction costs, and taxes. Model the wedge below.
How each line works
Working-capital true-up
You deliver the business at a “normal” level of working capital (the peg, usually a 12-mo trailing average). If actual working capital at close is below the peg, price drops dollar-for-dollar. See working-capital target.
Escrow
10% of equity value is a common baseline; sits at an escrow agent for 18-24 months as a security for indemnity claims. R&W insurance can often reduce this materially. See escrow.
Rollover equity
10-30% is typical when PE is the buyer. Tax-deferred if structured correctly. You’re now an LP in the sponsor’s HoldCo — same future upside, no liquidity. See rollover equity.
Advisor fee
Sell-side advisor typically 3-6% of EV on middle-market deals, with a minimum retainer. Larger deals compress the percentage. Lehman-formula structures still exist on smaller mandates.
Legal + QoE
M&A counsel runs $150K-$400K on a $10-25M deal; sell-side QoE runs $50K-$150K. Both scale with complexity, not size.
Tax
Very rough model: 20% federal LTCG + 3.8% Net Investment Income Tax + state rate. QSBS §1202 can eliminate federal on qualifying gain. See QSBS §1202 reference. Always model with a real tax advisor.
Sources & data provenance
Data on this page reflects the state of primary sources as of .
Aggregate escrow, indemnity, and working-capital data from private-company M&A.
Biennial benchmark of common deal terms in US private-target M&A.
This calculator is an illustrative rule-of-thumb model. Actual net proceeds depend on deal-specific negotiation, entity form, tax residency, and structuring choices. Consult a licensed M&A attorney and tax advisor for any real transaction.