Some thoughts to consider:
1) If you’re making near $1M per year from the agency then your tax rate is likely close to 35% versus the capital gains rate of roughly 25%.
2) You still have to work 5+ years versus walking away with the same amount.
3) Your equity is at risk until you fully cash out.
4) You’ll likely be guarantying any debt acquired against the agency to buy out your equity since it will be against the corporation.
Usually internal sales are done for reasons other than money. Its hard to beat the valuations from outside buyers, especially in the current environment where valuations have surged 30+% in the last few years.
Some thoughts to consider:
1) If you’re making near $1M per year from the agency then your tax rate is likely close to 35% versus the capital gains rate of roughly 25%.
2) You still have to work 5+ years versus walking away with the same amount.
3) Your equity is at risk until you fully cash out.
4) You’ll likely be guarantying any debt acquired against the agency to buy out your equity since it will be against the corporation.
Usually internal sales are done for reasons other than money. Its hard to beat the valuations from outside buyers, especially in the current environment where valuations have surged 30+% in the last few years.
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