THE BARATELLI INSTITUTE · Mentoring at Scale
INTERACTIVE COMPANION TOOL

The Liquidity Event Decision Simulator

Model your own pre-sale planning. Calculate net cash to family with and without the eight planning mechanisms that drive the highest-leverage tax and structural decisions in a private-business sale.

$5–8M
Typical pre-planning value on a $50M deal
8
Independent planning mechanisms modeled
5 min
To your personalized recommendation
STAGE 1 OF 5

Your Owner Profile

Three numbers establish the baseline. Headline price, current state of residence, and approximate timeline to a sale.

The number on the LOI. Pre-debt, pre-fees, pre-everything.
$
S Corporation
Pass-through; F-reorg / §338(h)(10) eligible
C Corporation
Potential QSBS qualification under §1202
LLC / Partnership
Pass-through; partnership-rollover mechanics
STAGE 2 OF 5

Expected Deal Terms

These are the leakage line items between headline price and gross cash at closing. Rough estimates are fine — defaults are typical for mid-market transactions.

$
$
Held by escrow agent for 12-24 months. Lower with R&W insurance (6-8%) than without (10-15%). Released if no claims.
$
$
Buyers require the business to deliver a normalized working-capital balance at closing (the "peg"). If actual WC at close falls short of the peg, the purchase price is reduced dollar-for-dollar. TTM 12-month average peg is the standard. Negotiated downward = direct addition to seller proceeds.
$
Reps and warranties insurance: typical premium 2.5-4% of policy limit; policy limit usually 10% of deal value. Often split 50/50 buyer/seller, or buyer-paid in seller-friendly markets. Reduces escrow holdback materially (6-8% with RWI vs. 10-15% without). Marsh, Aon, WTW, Lockton, Woodruff Sawyer.
$
Portion of equity rolled into buyer's structure rather than cashed out.
$
STAGE 3 OF 5

Tax Profile

Federal long-term capital gains tax is 23.8% (20% LTCG + 3.8% NIIT) for high-income filers. State tax stacks on top. We'll auto-fill from your residency selection; adjust if your situation differs.

%
%
Portion of price allocable to personal goodwill (capital-gain treatment vs. ordinary).
%
STAGE 4 OF 5

Pre-Exit Planning Mechanisms

Toggle the mechanisms applicable to your situation. The simulator computes the dollar value of each one in the context of your specific deal. Each mechanism's mechanics are explained in The Liquidity Event Playbook.

STAGE 5 OF 5

Your Results

Personalized to the inputs you provided. Updates in real time if you go back and change anything.

WITHOUT PRE-PLANNING
Net cash to family at closing
$19.7M
39.4% of headline price reaches family
WITH YOUR SELECTED PLANNING
Net cash to family at closing
$28.0M
56.0% of headline price reaches family
Same transaction. $8.3M more to family.
No negotiating leverage required. Pure structural arbitrage built before the LOI is signed.
+$8.3M

The mechanism-by-mechanism build

Each line is one independent mechanism's contribution. They sum to the differential above.

Step Amount ($M) Cumulative ($M)

Personalized recommendations

YOUR PERSONAL ACTION REPORT

Get your full 6-page personalized report by email

Includes the line-by-line build, mechanism-specific timing, named-counsel cross-references, and the next-action checklist for your situation. We'll also send the first chapter of The Liquidity Event Playbook as a free preview.

Disclaimer. The Baratelli Institute Liquidity Event Decision Simulator is a teaching tool. It produces order-of-magnitude estimates for educational purposes. All figures depend on your specific facts and current tax law (citations as of May 2026). Engage qualified professionals — M&A counsel, transaction CPAs, fee-only wealth advisors, and qualified tax counsel — for the actual planning and execution. This simulator does not constitute legal, tax, or investment advice for any specific person.
WANT THE METHODOLOGY BEHIND THIS TOOL?
This calculator is one chapter of The Liquidity Event Playbook.
The tool gives you the answer. The guide gives you the argument — the case law, the worked examples, the negotiation playbook, the cross-check tables, the exception cases. Read the chapter and you can defend your number to a board, a buyer, an examiner, or a counterparty.
The methodology behind this calculator is in Ch 1 What's About to Happen of the reference guide.
See the Guide → Browse all 22 guides
PROFESSIONAL DISCLAIMER · PLEASE READ

Educational and informational purposes only. This calculator and any output it produces are intended solely for general educational and decision-support purposes. They do not constitute investment, tax, legal, accounting, appraisal, lending, insurance, or any other professional advice, and they do not create a fiduciary, attorney-client, accountant-client, or advisor-client relationship of any kind.

Estimates based on your inputs. All results are estimates derived from the data and assumptions you provide. Tax law, accounting standards, regulations, market conditions, and the specific facts of your situation can materially change the answer. The Baratelli Institute, its affiliates, and any co-branding professional make no warranty of accuracy, completeness, currency, or fitness for any particular purpose, and disclaim all liability for decisions made in reliance on the output.

Consult your own qualified professionals. Before acting on anything calculated here, consult your own attorney, CPA, financial advisor, appraiser, lender, or other qualified professional licensed in your jurisdiction who has reviewed your specific facts and applicable current law. The Baratelli Institute is a publisher of practitioner reference material. It is not a registered investment adviser, broker-dealer, law firm, accounting firm, appraisal firm, or lender.

Co-branded versions: If a professional advisor's name and contact information appear on this tool, that advisor has elected to make the tool available to clients as a courtesy. Inclusion of an advisor's name does not constitute the advisor's endorsement of any specific result, nor does it transfer professional responsibility for the underlying methodology to that advisor. The disclaimer above applies regardless of co-branding.