You Sold Your Company for $100 Million. How Much Actually Hits Your Bank Account?
Congratulations.
Your company has just been sold for $100 million.
The headline is easy to understand:
Company Acquired for $100 Million
Your friends may assume you're now $100 million richer. For a moment, you might think the same thing.
Then closing day arrives.
You look at your bank account.
There isn't $100 million in it.
So where did the money go?
The answer is that a $100 million acquisition price is not necessarily the amount the seller receives in cash at closing. In a private-company sale, that headline number can be only the beginning of the calculation.
Let's follow the money.
First, a Note About Our $100 Million Deal
The company in this article is fictional.
Real acquisitions vary enormously. Some companies have debt; others have excess cash. A founder might own 80% of the business or 20%. Some deals use representations and warranties insurance. Others don't. Some contain earnouts, preferred shares or complicated investor rights.
So the dollar amounts in our simulation are illustrative, not market averages.
Where we use actual M&A market data, we'll say so.
For context, the 2026 SRS Acquiom M&A Deal Terms Study covers more than 2,300 private-target acquisitions worth $569 billion, closed between 2020 and 2025.
Now let's start with:
$100,000,000
Step 1: What Does the $100 Million Actually Mean?
Before spending anything, we need to understand the number itself.
A $100 million enterprise value and $100 million of equity proceeds are not necessarily the same thing.
Think about selling a house.
If your house sells for $1 million but there is a $300,000 mortgage attached to it, the value of the house isn't the same as the cash you walk away with.
Companies can work in a similar way.
Debt, cash and other agreed items can affect the amount ultimately available to shareholders.
For our simplified example, we'll begin with a headline deal value of $100 million and work toward the money available to the sellers.
Step 2: The Company Has Debt
Suppose our fictional company has $5 million of debt that must be dealt with at closing.
Our calculation becomes:
$100.0M headline value
− $5.0M debt
$95.0M
We've already lost our first $5 million from the amount available to equity holders.
Nothing mysterious happened.
The $100 million was simply never the same thing as $100 million of personal cash.
Step 3: Selling a Company Isn't Free
A $100 million company usually isn't sold with a handshake and a two-page contract.
There may be M&A lawyers, accountants, tax advisers, investment bankers and other specialists involved in getting the deal across the finish line.
For our fictional transaction, let's assume total transaction expenses of $3 million.
Again, this is an illustrative number, not an industry average.
Now:
$95.0M
− $3.0M transaction expenses
$92.0M
Still a lot of money.
But we're not finished.
Step 4: The Buyer Counts Again
A business doesn't freeze when the purchase agreement is signed.
Customers keep paying invoices. Inventory moves. Bills come due. Accounts receivable and accounts payable change.
That means the company's working capital can look different on closing day from what the buyer and seller expected when they negotiated the price.
This is where a purchase price adjustment, or PPA, can enter the picture.
In simple terms, the buyer and seller agreed to buy a company in a certain financial condition. After closing, they compare that expectation with what was actually delivered.
If the numbers are different, the purchase price may be adjusted.
This isn't an obscure feature of unusual deals.
SRS Acquiom's current data says 93% of deals have a purchase price adjustment mechanism, and 89% of deals with such a mechanism actually had an adjustment. Its 2026 working-capital study covers more than 1,500 private-target acquisitions worth over $385 billion with finalized PPAs.
Suppose our fictional deal produces a $700,000 downward adjustment.
Now:
$92.0M
− $0.7M closing adjustment
$91.3M
The number in the acquisition announcement hasn't changed.
The economics of the closing have.
Step 5: You Still May Not Get All $91.3 Million Today
Now we reach one of the least understood parts of selling a company:
escrow.
Imagine that, during the sale, you told the buyer:
The company paid its taxes correctly.
There are no major undisclosed lawsuits.
The financial information provided is accurate.
Important contracts were properly disclosed.
Then, six months after the acquisition, the buyer discovers a problem.
If every dollar of the purchase price has already been distributed, recovering money from dozens of former shareholders could become difficult.
One solution is to hold back part of the money in an escrow account for a period after closing.
The money hasn't necessarily disappeared.
But it isn't freely available to the sellers either.
SRS Acquiom says 12 to 18 months is a common M&A escrow period, although the actual duration depends on the risks and terms of the transaction.
How Much Can Sit in Escrow?
This is where the numbers become interesting.
SRS Acquiom reports that, when M&A insurance isn't used, the median general indemnification escrow has historically been around 10% of transaction value. When representations and warranties insurance is used, its data shows a median of around 0.5% for that type of escrow.
Those are medians, not rules.
A particular transaction can look very different.
For our fictional non-insured transaction, suppose $9 million is temporarily held in escrow.
Our closing-day calculation becomes:
$91.3M
− $9.0M temporarily held in escrow
$82.3M available to sellers at closing
The $9 million may eventually be released if there are no successful claims against it.
But today?
It isn't sitting in the sellers' bank accounts.
Why Is an Insurance Company Involved in Selling a Business?
This is where a completely different industry enters the transaction.
Representations and Warranties Insurance, usually shortened to RWI, can transfer certain risks associated with breaches of the seller's representations and warranties to an insurer.
Instead of relying entirely on a large pool of the seller's money sitting in escrow, an insured deal can use an insurance policy as part of the risk-allocation structure.
That helps explain the large difference between escrow levels in insured and uninsured deals.
But RWI isn't magic.
Policies have premiums, retention amounts, coverage limits and exclusions. Known problems, purchase price adjustments and certain other risks may be excluded from coverage. SRS Acquiom says RWI deductibles typically run around 1%–2% of transaction value, with the level often stepping down 12–18 months after closing.
So the economic question becomes interesting.
Do sellers leave millions of dollars in escrow?
Or do the parties pay to transfer some of that risk to an insurance company?
There is no universal answer.
But now we can see why an insurance broker and an insurer might suddenly appear in the middle of a $100 million technology-company acquisition.
They are part of the machinery that determines who carries the risk after the company changes hands.
Now for the Bigger Problem: Did You Own 100% of the Company?
So far, we've been pretending that “you sold your company” means “you owned the whole company.”
That's often not true.
Maybe you started with 100%.
Then you brought in a co-founder.
You gave employees stock options.
You raised a seed round.
Then Series A.
Then Series B.
By the time the company is acquired, perhaps your economic ownership is 40%.
Now the headline becomes much less useful.
The company sold for $100 million.
does not mean:
You received $100 million.
The seller proceeds must be distributed among the people and institutions that actually own the company.
And even ownership percentages don't always tell the entire story. Preferred investors may have liquidation preferences or other contractual rights that affect how sale proceeds are distributed.
For simplicity, let's assume our founder is economically entitled to 40% and there are no special preference complications.
Our sellers had $82.3 million available at closing.
Forty percent of that is:
$32.92 million
That's a very different number from the headline.
And part of the founder's share of the escrow may still arrive later if it is released.
What If Part of the $100 Million Is an Earnout?
There's another possibility.
The buyer believes your company is worth $80 million today.
You believe it's worth $100 million because revenue is about to explode.
Instead of killing the deal, the parties might agree on something like:
$80M at closing
plus
up to $20M later if agreed targets are reached
That extra payment is an earnout.
The deal can still have a potential value of $100 million.
But $100 million isn't necessarily changing hands today.
And the extra $20 million isn't necessarily guaranteed.
The company may need to hit agreed revenue, EBITDA, regulatory, product or other milestones before the money is paid.
This distinction matters whenever you see a large acquisition announcement.
Ask:
Is that guaranteed consideration?
Or:
Is that the maximum possible deal value?
Those can be very different numbers.
Let's Open the Bank Account
Here's our fictional transaction from beginning to end.
| What happened | Amount |
|---|---|
| Headline deal value | $100.0M |
| Debt payoff | −$5.0M |
| Transaction expenses | −$3.0M |
| Closing adjustment | −$0.7M |
| Seller proceeds before escrow | $91.3M |
| Temporarily held in escrow | −$9.0M |
| Cash available to sellers at closing | $82.3M |
| Founder's illustrative 40% share | $32.92M |
Again, the $5 million debt, $3 million fees, $700,000 adjustment, $9 million escrow and 40% ownership are our fictional assumptions.
They aren't a template for what every $100 million acquisition looks like.
The point is to see how quickly a headline valuation and an individual's closing-day cash can become two very different numbers.
And there's one more problem.
We Haven't Paid Tax Yet.
We're deliberately not putting a tax rate into the simulation.
Tax treatment can change dramatically depending on where the seller lives, the company's structure, the seller's basis, holding period, whether the transaction is a stock or asset sale, and numerous other factors.
Applying a generic 20% or 30% tax rate would make our neat example less accurate, not more.
So we'll leave the founder with $32.92 million for the moment.
Just remember:
that's before our hypothetical founder's taxes.
So Where Did the $100 Million Go?
It didn't simply disappear.
We were looking at several different kinds of money as though they were the same number.
Some may go toward debt.
Some may pay the professionals who completed the transaction.
Some can change through closing adjustments.
Some can sit temporarily in escrow.
Some belongs to other shareholders.
Some may depend on future performance.
And eventually, taxes enter the picture.
That's why these two sentences are not interchangeable:
The company sold for $100 million.
The founder received $100 million.
There's Another Business Hiding Inside the Deal
Now look at the transaction from another angle.
A $100 million acquisition isn't just an exchange between a buyer and a founder.
An entire industry can surround it.
Law firms structure the agreement.
Investment banks and M&A advisers help run the sale.
Accountants examine the numbers.
Tax specialists work on the structure.
Escrow and paying agents move and hold the money.
Insurance brokers arrange RWI.
Insurance companies take on certain risks.
Shareholder representatives deal with issues that continue after closing.
And after a successful exit, private banks and wealth managers may compete to manage the proceeds.
The newspaper headline usually contains the names of two companies.
Behind those names can be an ecosystem of businesses earning money by valuing risk, negotiating it, insuring it, holding money and moving it.
That's the part of M&A most people never see.
BEYOND THE OBVIOUS.
The next time you read:
Founder Sells Company for $100 Million
don't automatically imagine $100 million appearing in someone's checking account.
The headline number is only where the story begins.
Debt.
Fees.
Adjustments.
Escrow.
Insurance.
Earnouts.
Investors.
Taxes.
Follow the money through each layer and the number that finally reaches an individual seller can look very different.
So perhaps the more interesting question isn't:
How much did the company sell for?
It's:
How much actually hit the founder's bank account?
BEYOND THE OBVIOUS.
Sources
SRS Acquiom — 2026 M&A Deal Terms Study — Dataset covering 2,300+ private-target acquisitions worth $569 billion.
SRS Acquiom — M&A Escrow Statistics — Current data on escrows, RWI and purchase price adjustments.
SRS Acquiom — M&A Escrows Explained — Escrow mechanics and typical duration.
SRS Acquiom — 2026 Working Capital PPA Study — Analysis of 1,500+ private-target acquisitions with finalized PPAs.
SRS Acquiom — RWI Fast Facts — Coverage, retention, exclusions and underwriting information for representations and warranties insurance.