At a glance
- The variables Baltch says should decide among them are the point: how governance changes hands, how much equity a founder rolls over, and how long the outside investor intends to stay.
- Duration gets the least attention in founder conversations and the most in the documents, which is presumably why Baltch raises it in the same breath as governance and rollover.
- Dynasty's own entry on the menu, the Revenue Participation Interest, is pitched to owners reluctant to borrow or sell equity: a claim paid out of revenue sidesteps, he says, both an amortization schedule and a new name on the shareholder register.
The capital menu Harris Baltch of Dynasty Investment Bank walked Wealth Solutions Report editor-in-chief Julius Buchanan through—internally financed succession, bank debt, minority recapitalizations, outright sales, and instruments that sit between debt and equity—is familiar. The variables Baltch says should decide among them are the point: how governance changes hands, how much equity a founder rolls over, and how long the outside investor intends to stay.
Duration gets the least attention in founder conversations and the most in the documents, which is presumably why Baltch raises it in the same breath as governance and rollover. An investor who wants out in five years and one who can be paid from the firm's cash flow indefinitely are not the same counterparty, and the terms that reconcile them get fixed at signing; the right structure, on that logic, tracks an RIA's stage of development rather than any consensus about which instrument is best.
Dynasty's own entry on the menu, the Revenue Participation Interest, is pitched to owners reluctant to borrow or sell equity: a claim paid out of revenue sidesteps, he says, both an amortization schedule and a new name on the shareholder register. It also changes what gets underwritten, because a lender and an equity buyer size a firm on enterprise value while revenue participation sizes it on the top line—the number an owner can see most clearly and the one that thins fastest when a few clients leave.
Where that menu meets the industry's actual problem is succession, which this publication has argued is a documentation failure before it is a financing one. Capital allocates the economics of a handoff; it does not name the person taking over, and Baltch's emphasis on governance makes that plain, because a recapitalization concentrates decisions among fewer owners exactly when a founder's remaining years at the firm are shrinking. A founder who prices a minority stake without putting a successor in the file has financed the years he will still be working and nothing after them.
Two caveats belong on the transcript: the episode is a single interview with an investment banker whose firm sells the structures he describes, and it carries a sponsor, Ascentix Partners. It maps the choices well but reports nothing about which ones founders are making; the published summary cites no transaction, valuation or multiple.
What the menu does not shorten is the harder task underneath it: putting a name and a date on the transition, in writing, before the capital arrives.
Reported by the Succession & selling a firm desk from Wealth Solutions Report. Published . Corrections