FAQs

Glossary Terms

Asset Sale vs. Stock Sale
• Asset Sale: The buyer purchases specific assets and liabilities of the business.
• Stock Sale: The buyer purchases the entire company, including its stock, contracts, and obligations.

Business Valuation: The process of determining what a business is worth. It considers your financial performance, assets, market conditions, and what similar businesses have sold for.

Closing: The final step of the sale, where legal documents are signed, funds are transferred, and ownership officially changes hands.

Confidential Information Memorandum (CIM): A document prepared by a broker to market a business confidentially. It provides financials, operations info, and key value drivers to qualified buyers.

Deal Structure: The way a business sale is financed and organized, including down payments, seller financing, earnouts, and terms.

Due Diligence: The process where a buyer reviews all aspects of a business, from financial, legal, operational, and contractual, before finalizing the purchase.

Earnout: A payment structure where part of the sale price is paid over time based on the business’s future performance.

Non-Disclosure Agreement (NDA): A legal document ensuring that potential buyers keep your business details confidential during the sale process.

Working Capital: The difference between a company’s current assets and current liabilities. Buyers often require a specific level of working capital to be included in a deal


If you need help with larger, more complex deals, Masterworks Capital embraces the same mindset as Sunbelt Business Advisors, with a sharper lens for the $10M–$250M range.
Visit: www.mworkscapital.com