Deal structure
A majority recapitalization is a deal where an investor buys more than half of a company, and the owner keeps a smaller stake and often stays on to help lead.
In a majority recapitalization, an investor buys control, which is more than half of the company. You take significant cash off the table and keep a minority stake that can grow alongside the investor.
For example, an investor buys 70% of a company valued at $30 million, paying $21 million. The owner keeps 30%, worth $9 million on those terms, and stays on to lead. If the company grows, that 30% grows too.
This structure fits owners who want to reduce risk, gain a partner and still take part in future growth. It works best when you are ready to share decisions with the new majority holder.
Capstreet's stated criteria include "Primarily majority investments" and "Entrepreneurs reinvest alongside Capstreet". Compare it with other paths in majority vs minority recapitalization. Related terms are rollover equity and minority recapitalization.
Related terms
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