Net Proceeds From Selling: Your Walk-Away Number

The price a buyer offers for your company is not the money you keep. The International Business Brokers Association asks its members about their deals every quarter. From April to June 2026, sellers of companies worth $5 million to $50 million got 83% of the price on the day of the sale. The rest was paid later. Some of that later money came only if the business reached goals that the buyer set. Taxes and fees for advisors and lawyers then take another share.

So I don't start there. I start from the money you need in the bank after the sale. Then I find the lowest offer that still leaves you that much. That amount is your walk-away number: the least you should accept. This fall, 2 software founders asked me about selling. One had an offer that sounded big, but after taxes and fees it left less than they needed. The other already took home a good income from the company every year. So a sale only made sense if it paid more than the income they'd lose. Let's work out your number.

What net proceeds from selling a business really are

Net proceeds are the money that lands in your account after everyone else is paid.

Four things stand between the price and your account. Taxes on the gain. Fees for your advisor, lawyer and accountant. Price cuts for things the buyer takes on. And the part of the price paid later instead of on the day of the sale.

Each one exists for a reason on the buyer’s side. A buyer pays part of the price later because it does not yet trust your numbers, so it shares that risk with you. It cuts the price for customers who prepaid, because it has to deliver service it never got paid for. Taxes and fees are plain arithmetic, but they are percentages of a large number, so they add up fast.

Most net proceeds calculators run this forward: price in, take-home out. I walked through that direction in the post-tax math of selling versus keeping your company. Here we run it backwards, because that is how the decision really works. You know what you need. You do not know the price yet.

The backwards waterfall: from take-home to price in 5 steps

Here is an illustration with round numbers, not a real deal. A founder in California owns all of a SaaS company. They are married and file taxes jointly. Their shares cost almost nothing when they started, so nearly the whole price counts as gain for tax. The company has no debt. Their goal is $6 million in the bank after everything.

Step 1: Start with the take-home goal

$6.0 million. This is the only number you pick. Every other number follows from it.

Step 2: Add the tax

For 2026, the IRS taxes long-term gains at the top federal rate of 20% once a married couple’s taxable income passes $613,700, per Revenue Procedure 2025-32. California gives gains no lower rate. The California Franchise Tax Board taxes them like salary, and its top bracket is 12.3%. Income over $1 million pays another 1%, per the Form 540 instructions. Some sellers also owe the 3.8% federal tax on investment income.

Add 20% and 13.3% and you get about 33%. For this illustration, assume 33% in total and no 3.8% tax. To keep $6.0 million after a 33% tax, you need $9.0 million before tax. Check it: 33% of $9.0 million is about $3.0 million, and $9.0 million minus $3.0 million leaves $6.0 million.

Step 3: Add the fees

Say $600,000 for the advisor, lawyer and accountant together. Fees come out before the tax is worked out, so they sit on top of the $9.0 million. Running total: $9.6 million. Our guide to what SaaS sellers pay M&A advisors covers what drives that number.

Step 4: Add the price cut for prepaid customers

Many SaaS customers pay for a year up front. The cash is in your account, but you have not delivered the service yet. Accountants call that deferred revenue. The buyer has to deliver those months without getting the cash, so buyers often cut the price by some or all of it. Our post on how annual prepays get treated at close covers the negotiation.

Say the cut is $400,000. Running total: $10.0 million. That is the cash this founder needs on the day of the sale.

A second adjustment works the same way. The working capital target is the amount of cash and short-term bills the buyer expects you to leave in the company. Come in under it, and the difference comes out of your check. Our guide to working capital targets and the closing adjustment explains how buyers set it. This illustration assumes you hit the target.

Step 5: Add the part paid later

Buyers rarely pay everything on day one. The rest arrives later as an earn-out, which is a slice of the price paid only if the company hits agreed targets. Or as a seller note, which is a loan you give the buyer. Or as escrow, which is money held back for a set time in case problems turn up. Our guides to how earn-outs work in SaaS acquisitions and escrow holdbacks cover each one.

Count that later money as zero until it arrives. It is also taxed when it is paid, which this illustration leaves out because it counts that money as zero. If 83% of the price comes on day one, the price has to be about $12.0 million for that 83% to equal $10.0 million.

To put $6 million in the bank, this founder needs an offer of about $12.0 million. Only $6 million of that $12.0 million is money they can count on keeping.

The keep test: what the company already pays you

A sale swaps a yearly income for one payment. The payment has to be worth the swap.

The second founder had a different problem. Their company paid them well every year, and nothing forced a sale. So the question was not what they needed. It was how big a payment would have to be to replace that income.

There is a simple way to price it. Take the cash the company pays you each year after tax. Then ask how much money, sitting in a safe investment, would pay you the same amount with no work. On October 16, 2026, the 10-year US Treasury paid 5.09% a year, per the US Treasury’s daily rates.

Say the company pays you $400,000 a year after tax. At 5.09%, it takes about $7.9 million to earn $400,000 a year in interest. Run $7.9 million through the same 5 steps, with the same fees and price cut, and the price comes out at about $15.4 million.

This is rough on purpose. It ignores the tax on the interest, which pushes the number up. It also assumes the company keeps paying you $400,000 forever, which pushes it down. Treat it as a rough guide, not a quote.

I call the result the Two Floors:

Below the need floor, walk away. The sale does not pay for your plan. Above the keep floor, the sale beats keeping the company on income alone. Between the two, you have a real choice. You take less than the company pays you, and in return you get your time back and stop carrying the risk that the company has a bad year. That can be a good trade. Make it on purpose.

Sometimes the keep floor is the lower one. That happens when the company pays you a modest income but your plan needs a large sum. Then the need floor is your walk-away number, and keeping the company is the fallback if no offer clears it.

How to protect your net proceeds in a negotiation: 5 rules

1. Work out both floors before the first call with a buyer. Once a buyer names a price, every number after it gets compared to theirs. Bring your own.
2. Negotiate the share paid on day one, not only the price. In the illustration, moving day-one cash from 83% to 90% lowers the need floor from $12.0 million to $11.1 million. The founder takes home the same $6 million on a lower price.
3. Ask how the buyer will treat prepaid customers early. At 83% paid on day one, every $1 cut from day-one cash takes about $1.20 of price to make up. The $400,000 cut in the illustration cost about $480,000 of price.
4. Replace my 33% with your real tax rate before you sign anything. Your state, your company’s structure and how the deal is written all change it. Founders of some C corporations qualify for a federal rule called QSBS that can remove much of the federal tax. Our guide to tax planning before you sell covers it.
5. Redo the math for every offer. Each offer has its own mix of cash now, money later and price cuts, so each one has its own take-home. Two offers with the same price can leave you with very different amounts.

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