---
title: "What Is Rollover Equity? Private Equity Glossary"
description: "Rollover equity is the part of a seller's proceeds that the seller reinvests in the company after the sale, instead of taking that value in cash."
url: https://capstreet.multisites.ai/glossary/rollover-equity
publisher: Capstreet
phone: +1-713-332-2700
contact: https://capstreet.multisites.ai/contact
---

Deal structure

# Rollover Equity

Rollover equity is the part of a seller's proceeds that the seller reinvests in the company after the sale, instead of taking that value in cash.

Rollover equity means you keep part of your ownership after the sale. Instead of cashing out every dollar, you put some of your proceeds back into the new company alongside the buyer.

For example, a company sells for $30 million. The seller takes $24 million in cash and rolls $6 million into the new company. The seller now owns a smaller share of a business that has a partner and fresh capital.

Rollover matters for two reasons. First, buyers like it because it keeps you committed. Second, it can give you a later payout when the investor sells, often called the [second bite of the apple](https://capstreet.multisites.ai/glossary/second-bite-of-the-apple). The risk is that the stake can lose value as well as gain it.

Capstreet describes its criteria this way: "Entrepreneurs reinvest alongside Capstreet". Taxes on rollovers vary, so ask your own tax adviser. For details, read the [rollover equity guide](https://capstreet.multisites.ai/guides/rollover-equity).

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

## Related terms

-   [Second Bite of the Apple](https://capstreet.multisites.ai/glossary/second-bite-of-the-apple)
-   [Majority Recapitalization](https://capstreet.multisites.ai/glossary/majority-recapitalization)
-   [Incentive Equity](https://capstreet.multisites.ai/glossary/incentive-equity)

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