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“How To Buy Out Your Business Partner (And How To Value Any Business)”

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Splitting from a business partner doesn’t have to mean torching the company to get there.

Chandler Bolt, the entrepreneur and author who built Self-Publishing School, has been through a co-founder equity split himself, and in his video “How To Buy Out Your Business Partner (And How To Value Any Business),” he breaks down exactly how he’d handle it if he had to do it again. His pitch is simple: treat the buyout like a transaction, not a breakup, and get the valuation nailed down before anyone starts negotiating numbers off feelings. That’s the difference, in his framing, between a clean exit and a stalemate that drags on for months.

• Bolt says a buyout starts with both partners agreeing on the necessity and desired outcome of the separation, going back to the original operating or buy-sell agreement before any numbers get discussed.
• He contrasts market-multiple valuation methods — applying a multiple to annual net profit, Seller’s Discretionary Earnings (SDE), or EBITDA — against asset-based calculations for privately held companies.
• Bolt explains that buyouts rarely close as a single lump-sum cash payment, and instead typically rely on seller financing, promissory notes, milestone earn-outs, or installment schedules.

Depersonalizing the Split

Bolt’s first move isn’t a spreadsheet — it’s a conversation. He argues that most partner buyouts go sideways not because of bad math but because one side feels ambushed. Before anyone talks price, both partners need to be transparently aligned on why the split is happening and what each side actually wants out of it, and that means pulling out the original operating agreement or buy-sell agreement to see what was already promised. Skipping that step, in his experience, is how amicable exits turn into lawsuits.

That groundwork matters because it sets the tone for everything downstream. If one partner is leaving over burnout, diverging vision, or plain misalignment on where the company should go, Bolt’s advice is to name that reason out loud rather than let it fester into a fight over dollar figures later. Readers who’ve followed his own account of parting ways with a co-founder, detailed in Why I Don’t Have A Business Partner Anymore, will recognize the same instinct: separate the relationship problem from the financial one before trying to solve either.

Valuing the Business Objectively

Once alignment is established, Bolt moves to the number that actually drives the deal: what the company is worth. He warns against speculative, forward-looking projections and instead pushes for valuations built on verified historical earnings, either through a formulaic approach or a third-party valuation professional.

He lays out the two dominant methods for privately held businesses. The first is a market-multiple approach — applying an industry-appropriate multiple to annual net profit, SDE, or EBITDA. The second is an asset-based calculation, which totals up what the company owns minus what it owes rather than pricing its earning power. Bolt’s point is that whichever method gets used, it needs to be defensible and consistent, not a number one partner pulled out of the air because it “felt fair.”

Get the objective valuation locked in first — because negotiating price before you agree on value is how partners end up in a stalemate.

Structuring the Payment

Here’s where Bolt separates real-world buyouts from the tidy version most people imagine. A departing partner rarely walks away with a single check. Instead, Bolt details structured seller financing, promissory notes, milestone earn-outs, and installment schedules — mechanisms designed specifically to protect the company’s ongoing operating cash flow while still paying the exiting partner in full over time.

That structuring decision is as much strategic as it is financial. A business that drains its reserves to cash out a partner in one lump sum can cripple its own runway right when it needs stability most. Spreading payments across milestones or a fixed schedule lets the remaining owner keep the lights on while honoring the buyout terms — a balance Bolt treats as non-negotiable for any deal to actually hold up.

Closing the Deal Legally

The final stage, in Bolt’s breakdown, is formal legal execution. That means bringing in acquisition attorneys and accountants to draft the definitive purchase agreement, formally transfer equity, and handle restrictive covenants like non-compete clauses that keep a departing partner from turning around and competing against the business they just sold their stake in.

Bolt frames this step as the one entrepreneurs are most tempted to shortcut — and the one they can least afford to. A handshake and a wire transfer without a signed agreement leaves both sides exposed if disputes resurface later. For founders navigating this alongside broader ownership questions, the entity structure itself matters too, which is where resources like LLC vs Sole Proprietor: Which is best for YOUR business? come into play before a buyout even gets to the negotiating table.

Bolt’s core message throughout is that a partner buyout isn’t a single event — it’s four sequential decisions: agree on the why, agree on the number, agree on how the money moves, then get lawyers to make it official. Skip any one of those steps, he says, and the deal either stalls or comes back to bite whoever cut corners.