---
title: "What Is Recapitalization? Private Equity Glossary"
description: "A recapitalization changes a company's mix of owners and debt. It lets owners take cash out of the business while keeping part of the equity."
url: https://capstreet.multisites.ai/glossary/recapitalization
publisher: Capstreet
phone: +1-713-332-2700
contact: https://capstreet.multisites.ai/contact
---

Deal structure

# Recapitalization

A recapitalization changes a company's mix of owners and debt. It lets owners take cash out of the business while keeping part of the equity.

A recapitalization, or recap, resets who owns the company and how it is funded. An investor puts in money or buys shares. The owner takes some cash off the table and keeps a stake.

For example, an owner holds 100% of a business worth $30 million. An investor buys 60% for $18 million. The owner receives cash for that share and keeps 40%, now worth $12 million on those terms. The owner also gets a partner to fund growth.

Recaps matter because they offer a middle path. You get liquidity without a full exit. The two main types are [majority recapitalization](https://capstreet.multisites.ai/glossary/majority-recapitalization) and [minority recapitalization](https://capstreet.multisites.ai/glossary/minority-recapitalization). Which fits depends on how much control you want to keep.

Capstreet states it invests in "Primarily majority investments" and that "Entrepreneurs reinvest alongside Capstreet". Read the full guide at [recapitalization](https://capstreet.multisites.ai/recapitalization).

[Read nextRecapitalization: take cash out and keep a stake in what comes next](https://capstreet.multisites.ai/recapitalization)

## Related terms

-   [Majority Recapitalization](https://capstreet.multisites.ai/glossary/majority-recapitalization)
-   [Minority Recapitalization](https://capstreet.multisites.ai/glossary/minority-recapitalization)
-   [Rollover Equity](https://capstreet.multisites.ai/glossary/rollover-equity)

## Ready to get started? Let’s talk.

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