Exit Returns Calculator

Calculate exit returns across scenarios - financial sale, strategic sale, and dividend recapitalization.

Entry Parameters

Entry EBITDA

Entry multiple5x

Hold period (years)

Capital Structure

Senior debt (% of EV)50%

Senior interest rate

Debt term (years)

Seller note (% of EV)15%

Seller note rate

Equity required:$1,750,000

Operating & Exit Assumptions

Annual EBITDA growth8%

Exit multiple6x

Annual distributions

Cash Flow Projections

Year	EBITDA	Debt Service	Seller Note	Free Cash	Distribution	Remaining Debt
1	$1,080,000	($463,883)	($37,500)	$578,617	$100,000	$2,961,117
2	$1,166,400	($463,883)	($37,500)	$665,017	$100,000	$2,652,012
3	$1,259,712	($463,883)	($37,500)	$758,329	$100,000	$2,321,270
4	$1,360,489	($463,883)	($37,500)	$859,106	$100,000	$1,967,376
5	$1,469,328	($463,883)	($37,500)	$967,945	$100,000	$1,588,709

Exit Analysis (Year 5)

Exit EBITDA	$1,469,328
Exit EV (6.00x multiple)	$8,815,968
Less: Remaining Debt	($1,588,709)
Equity Value at Exit	$7,227,259
+ Cumulative Distributions	$500,000
Total Return to Equity	$7,727,259

Equity Invested

$1,750,000

Total Return

$7,727,259

MOIC

4.42x

IRR

36.4%

Exit Route Comparison

Financial Sale

$8,815,968

MOIC: 4.42x

Strategic Sale (+25%)

$11,019,961

MOIC: 5.68x

Dividend Recap (3x debt)

$2,819,275

MOIC: 1.90x

Understanding Search Fund Exits

The exit is where search fund investors and operators realize their returns. The typical search fund holds a company for 5–7 years before pursuing a liquidity event. During this period, equity value grows through a combination of EBITDA growth, debt paydown, and potential multiple expansion.

Returns to equity holders come from two streams: periodic distributions (dividends or management fees paid during the hold period) and the terminal exit value (equity value at the point of sale). The combination of these two streams determines the total return, MOIC, and IRR for investors.

Exit Routes Compared

Financial sale.Selling to a private equity firm or another search fund. Typically priced at market multiples (5–8x EBITDA for SMEs). Clean process but competitive multiples.
Strategic sale.Selling to a corporate buyer who values synergies (cost savings, market access, technology). Strategic buyers typically pay a 15–30% premium over financial buyers. Running a competitive auction maximizes strategic premiums.
Dividend recapitalization.Refinancing the company to distribute capital to equity holders while retaining ownership. Useful when the operator wants to return investor capital without giving up the business. Typically leverages 2.5–3.5x EBITDA.
Long-term hold. Continuing to operate and distribute cash flows. Some search fund operators choose this path when the business generates attractive cash yields and they enjoy the operating role.

Using This Calculator

Set your entry deal parameters (EBITDA, multiple, capital structure), operating assumptions (EBITDA growth, distributions), and exit terms. The calculator projects year-by-year cash flows, debt paydown, and compares three exit routes side by side with MOIC and IRR metrics.