A liquidity event is not the finish line. It is the largest financial decision most business owners ever make, and the first day of the next chapter. Here is what we tell clients before, during, and after a sale.
A business sale unfolds in three stages: getting ready, the transaction itself, and everything that comes after. Most owners, and most advisors, focus on the middle one.
The decisions that move the most money, gifting business interests, choosing between an ESOP and a third-party sale, structuring an earn-out, are almost always made in the first stage, often years before a deal exists. Below is what we tell clients at each stage, the mistakes that show up most often, and how state law changes the math depending on where you live.
The Three Stages of a Sale
A business sale is not one event. It is three, and most owners only prepare for the middle one.
Stage One · Years Before
We help owners get the business, and the balance sheet, ready. That means cash flow modeling, ownership structure review, succession planning, valuation prep, and timing. It also means coordinating with the CPA, the trust attorney, and the investment banker before anyone signs anything.
Stage Two · The Transaction
We act as a steady, informed voice in the room. That means coordinating every advisor at the table, managing the tax consequences of deal structure, and helping an owner make clear decisions through what is often the most emotional stretch of the process.
Stage Three · What's Next
The business is gone, and a portfolio takes its place. We build the investment strategy, the estate plan, and the giving plan around what the family actually wants, not around what the money happens to be sitting in.
What Goes Wrong
In a survey of 107 corporate attorneys who work on business sales, the same handful of mistakes came up again and again. None of them are exotic. All of them are avoidable, if you catch them early.
Watch for exclusivity periods stretched to two years instead of the usual six months, and commission structures that pay the same rate for debt as for equity.
Read the Full WhitepaperRetention bonuses, exit-event stock options, and non-solicitation agreements tied to severance keep the people a buyer is actually paying for.
Read the Full WhitepaperClean receivables, audited financials, and a tidy balance sheet do for a sale what they do for a house showing.
Read the Full WhitepaperUnresolved tax issues, family members on the payroll at above-market pay, or environmental violations a buyer will have to clean up and price in.
Read the Full WhitepaperA portion of every earn-out payment is typically taxed as ordinary income, not capital gains, and most owners find that out too late.
Read the Full WhitepaperEstate and tax planning around a sale mostly work before the business is under contract. Once a deal is signed, most of the best options are already off the table.
Talk to Us EarlyFive Decisions Worth Getting Right
Every business sale eventually runs into the same five questions. Here is the short version of each.
Employee Ownership
Life After the Exit
Deal Team
Deal Structure
Family Business
Where You Sell Matters
State law and state tax policy shape a sale as much as deal terms do. We work with clients in Alaska, Washington, Oregon, California, Arizona, and Nevada, six states with six very different rules. Select a state for what to know.
Gold states are highlighted below. The other 44 states are shown for context only and are not part of this guide.
General information only, current as of 2026. State tax law changes, sometimes every year. Nothing on this page is legal or tax advice; talk with your CPA and attorney about your specific situation. Parcion Private Wealth does not provide legal or tax advice.
How We Work
Every relationship starts the same way, regardless of where you are in the process.
We ask a lot of questions before we recommend anything. This meeting is about understanding the business, the family, and what "enough" actually looks like to you.
We come back with a strategy: how the sale should be structured, which advisors belong at the table, and what needs to happen before you sign anything.
If the fit is right on both sides, we confirm it here.
Accounts open, structures get built, and the plan becomes real.
We revisit the plan at least once a year, more often around a major event like a sale.
Frequently Asked
A liquidity event is any transaction that turns an illiquid asset, usually a closely held business, into cash or marketable securities. For most business owners, that means selling all or part of a company they built. It is the moment concentrated business wealth becomes diversified personal wealth, and it changes almost every financial decision that follows.
Ideally, two to five years before you plan to sell. Strategies like gifting business interests to family, setting up an ESOP, or restructuring ownership to reduce taxes at sale generally need time to work, and some of them stop being available once a deal is formally on the table.
For most sales above one million dollars, corporate attorneys overwhelmingly say yes. In one survey, every attorney recommended one above ten million dollars in value, and more than ninety percent recommended one between one and ten million. A banker's job is to build the model, find buyers without exposing your business to the market prematurely, and give you an honest read when your own attachment to the company clouds the number.
An Employee Stock Ownership Plan lets employees acquire company stock over time through a trust, funded by tax-deductible company contributions. It can be a highly tax-efficient exit, including the ability to defer capital gains tax under a Section 1042 election, but it usually requires at least 25 employees, roughly three million dollars in EBITDA, and a five- to ten-year transition to work well.
An earn-out defers part of your sale price until the business hits agreed performance targets after closing. The risk is control: if the buyer runs the business differently than you would have, your earn-out suffers. Negotiate real authority over key decisions during the earn-out period, and know that a portion of every earn-out payment is typically taxed as ordinary income rather than capital gains.
Waiting too long to bring in outside advisors. Estate planning, tax structuring, and succession planning all depend on time, and most of the best strategies are only available before a deal is signed. A close second: treating the sale process itself, the provider agreements, the earn-out terms, the buyer's list, as a formality instead of a negotiation.
The tools that matter most, valuation discounts on gifted business interests, trusts that let a business appreciate outside your taxable estate, and charitable structures, generally need to be in place before the business is under contract. Once the sale closes, you are choosing among what is left, not designing the plan.
Without a capable successor, a formal transfer plan, and family agreement on how the business and its value will be divided, even a well-drafted estate plan tends to end up in a dispute. Family succession only works when the successor, the family, and the legal structure are addressed together, not one at the expense of the others.
No. Parcion is a fiduciary registered investment advisor and coordinates closely with each client's CPA, trust attorney, and other professionals, but does not provide legal or tax advice directly. Nothing on this page should be treated as legal or tax advice.
Significantly. A California resident selling a business can pay a state income tax rate as high as 13.3 percent on the gain, with no capital gains discount, while a Nevada or Alaska resident may pay no state income tax at all. Community property rules, capital gains treatment, and trust law also vary widely by state, which is why domicile and residency planning is often part of the conversation well before a sale.
Thinking About What's Next
If you are getting ready to sell, in the middle of it, or holding proceeds and wondering what to do with them, we would like to hear from you.
Talk to Us