Selling a majority stake means keeping an interest in the business and giving up control of it. That trade can be entirely sensible, particularly where the buyer brings capital, distribution or credibility the business cannot build alone. What founders underestimate is how much changes the day someone else can outvote them on decisions they used to make alone.
The price is rarely the most important term in the agreement.
What changes above fifty percent
Control of ordinary decisions passes to the majority holder: appointing directors, approving budgets, setting strategy and deciding whether to sell. You retain economic interest in proportion to your holding.
Minority protections have to be negotiated into the agreement. Veto rights over specified decisions, board representation and rights on a future sale do not exist automatically.
How service businesses are valued
Advisory and consultancy businesses are largely valued on relationships and recurring revenue, which makes them harder to value than asset-based businesses. A buyer is assessing how much of the revenue survives without the founder.
That is why earn-outs are common: part of the price is paid later, conditional on the business performing. Read those terms carefully, because you may be working towards targets while no longer controlling the decisions that affect them.
The terms that matter more than price
What you are obliged to do after the sale and for how long. Restraint of trade limiting what you may do next. How disputes are resolved. What happens to your remaining stake if the buyer sells. And whether you can be diluted by a later share issue.
A high headline price with a long lock-in and a restrictive restraint can be worth less than a lower price with freedom.
Prepare the business first
Buyers pay more for businesses with clean records, contracts in the company name rather than the founder’s, and revenue that does not depend entirely on one person. Registration and current annual returns with the Companies and Intellectual Property Commission are the baseline.
Every step that makes the business less dependent on you raises what it is worth, which is the same work that makes it easier to run in the meantime.
Frequently asked questions
What do you lose when you sell a majority stake?
Control of ordinary decisions, including appointing directors, setting strategy and deciding on a future sale. You keep economic interest proportional to your holding.
Do minority shareholders have automatic protections?
Very limited ones. Veto rights, board representation and rights on a later sale must be negotiated into the agreement.
How are service businesses valued?
Largely on recurring revenue and how much of it survives without the founder, which is why earn-out structures are common.
What is an earn-out?
Part of the purchase price paid later, conditional on performance. The risk is being held to targets while no longer controlling the decisions.
How do I raise what the business is worth?
Clean records, contracts in the company name, and revenue that does not depend on one person.
Further reading
Originally published in January 2018. Updated September 2026 to explain what selling a majority stake involves rather than reporting one transaction.
