Structuring Reinvestment Transactions
How PE reinvestment structures actually work: from rollover and sweet equity mechanics to liquidation preferences, minority protection rights, and German tax considerations.
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Table of contents
Chapter 1
The Strategic Case for Reinvestment
Why buyers require seller reinvestment at exit
Rollover equity, sweet equity, and co-investment structures
How reinvestment aligns incentives on both sides
Chapter 2
Valuation, Dilution and Tax
Valuation of rollover stakes and liquidation preferences
Worked example: how participating vs. non-participating preference shapes your exit
Dilution through add-on rounds and German tax treatment
Chapter 3
Risks, Negotiation and Exit
Minority rights, leaver clauses, and add-on valuation traps
Negotiation levers for sellers
When reinvestment creates value — and when it does not
Here's what founders and advisors say
Sophie van der Berg
CEO @ VDP Partners
“I read this before our first advisor meeting, and it completely changed how we approached the deal structure.”
About the authors
Thomas Eriksen
Partner @ Northvane
Transaction advisor focused on mid-market PE exits across DACH. Has structured deal terms on 30+ transactions over the past decade.
James Whitford
Partner @ Northvane
Corporate finance specialist with a background in cross-border M&A. Advises founders on governance, rollover mechanics, and post-exit positioning.
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