How a Minority Recapitalization Works, Step by Step — BOLD
The Longevity Dividend works through a hybrid preferred instrument, capped at 20% equity, that pays the founder cash at closing, accrues a preferred return instead of collecting monthly payments, and redeems on a 10-year clock — with two buyback windows that let the founder repurchase BOLD's stake early on defined terms.
What is the underlying instrument?
BOLD's investment is a Hybrid Preferred Instrument with detachable warrants. It carries a preferred return that accrues rather than requiring monthly cash service, which keeps cash inside the business available for growth. The warrants survive a founder buyback unless they're separately repurchased at fair value.
How does the Founder Buyback Option work?
The founder can repurchase 100% of BOLD's position in one of two windows:
- Years 3–5 (early window): a fixed, floor-return price set at closing — if the company outperforms, the founder captures all of the upside above that floor.
- Years 6–9 (later window): the greater of that floor price or the company's current fair market value.
- Absent a buyback, the position redeems on defined terms at the 10-year mark.
What is the two-phase growth thesis?
BOLD underwrites around a two-phase growth path: roughly 67% EBITDA growth in Phase 1 (Years 0–3), followed by steadier compounding of about 15% per year through Year 10. This thesis is what the P.R.E.P. Architect and the 700-to-1,000-day value creation plan are built to support.
What is the Monetization Loan, and why does it matter for taxes?
Instead of structuring liquidity as a straight equity sale — which triggers immediate capital gains tax — BOLD can structure part of the founder's proceeds through a Monetization Loan designed to defer rather than accelerate tax. In BOLD's modeled comparisons, this typically puts roughly 30–37% more cash in the founder's pocket on day one versus a same-size straight equity sale.
BOLD also introduces founders to a preferred lender network (senior, unitranche, or mezzanine) for sponsor-backed, covenant-lite debt terms that standalone lower-middle-market borrowers usually can't access on their own.