Deal Structure

Escrow

Money held by a third party after closing to cover possible claims or adjustments. Why it matters: Escrow protects the buyer against certain claims, but it delays part of the seller’s proceeds and should have clear release rules.

Related terms

Closing

The moment when the sale officially happens and ownership transfers. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

Seller

The current business owner who wants to sell the business. Why it matters: The seller is not just handing over ownership; they are also proving the business, answering diligence requests, negotiating risk allocation, and often helping with transition.

Buyer

The person, company, investor, or fund trying to buy the business. Why it matters: Different buyers value different things, so knowing the buyer type helps an owner understand likely questions, risks, financing needs, and negotiation style.

More from Deal Structure

Asset Sale Cash at Close Cash-Free Debt-Free Contingent Payment Debt-Like Items Earnout Holdback Majority Sale Membership Interest Sale Minority Rollover Minority Sale Purchase Price Adjustment

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