We recently assisted two sellers in a transaction with their key management personnel. Oftentimes, your key employee is your best buyer for many reasons including the following:
1. Key employees know more about the business than outside buyers which typically reduces owner involvement in transition.
2. Key employee offers the best chance of negating the threats associated with large amounts of personal goodwill and/or customer concentration.
3. Intimate knowledge of the inner workings of the business typically results in a better purchase price as the employee has a lower assessment of risk in the business and oftentimes can access financing not available to outside buyers.