How Long Should You Stay After Selling Your MSP?

Seven Months Is the Number to Beat

The two-year request is real. Buyers make it in good faith, sellers accept it in good faith, and Josh watched client after client come back from a negotiation pleased that the buyer wanted them to stay. Then he started counting. For years the longest anyone actually stayed was seven months, and a lot of sellers left right around the seven-month mark. More recently he has seen the other end of the range too: a couple of owners who sold fifteen years ago and are still there, in what he calls an awesome relationship. So long stays are possible. They are just not what usually happens, and the reason has less to do with the buyer than with the state of mind the seller is in when he agrees to one.

Josh describes that state precisely. You sell, you get a great number, and almost immediately you feel the absence of the paycheck. There is no more money coming in, and the instinct is to protect the new asset sitting in the bank. A salary of two hundred thousand dollars a year to stay on sounds terrific, because it means you do not have to draw down. That is a reasonable feeling and a poor basis for a commitment. The seller agrees to a long stay as a former owner protecting a nest egg, and a few months later finds himself an employee reporting to someone else, inside a company he no longer controls, doing work he may no longer want to do. The arrangement was priced like a pension and lived like a job. Seven months is roughly how long that contradiction takes to surface.

• Treat a two-year request as the buyer's opening position, not as a forecast of what will happen.
• The comfort of a post-sale salary is the wrong reason to agree to a long transition. Decide what you actually want the next year of your working life to look like first.
• Long post-close stays do happen, but they come from fit between seller and buyer, not from the length written into the contract.

How Long Should a Seller Stay After Selling a Business?

The clearest case in Hartland's answer is a seller who has been paying himself four or five hundred thousand dollars a year. He offers to take a haircut and stay on for two hundred and fifty thousand. To him that is a concession. To the buyer it is a salary far above market for the role he will actually fill, and the arrangement is dead before it starts. The buyer would rather complete the transition quickly and let him go, because transition support is part of the deal and a paid engagement at that price is not. Hartland is clear that buyers generally do want the seller to stay as long as possible, because the seller carries the knowledge and the customer relationships. But that preference rests on two assumptions: that the two sides can agree on pay and structure that work for both of them, and that either side can end the consulting or employment arrangement if it is not working, because nobody can know in advance whether it will. Motive matters as much as money. The most common reason owners sell today is retirement, and a retiring owner is rarely looking to stay for years. In Hartland's experience those sellers want out within a year to eighteen months, or less. When the business depends heavily on the owner, the buyer may make the offer contingent on a minimum stay, such as six months.

Put those pieces together and the question has an answer, just not a single number. For most MSP owners selling to retire, the realistic range sits somewhere between six and eighteen months, and the right point inside it is set by three things decided long before the closing date. The first is dependence: how much of the client relationships, the technical knowledge and the leadership of the company still lives in your head. The second is motive: whether you are leaving to retire or want a role in what comes next. The third is pay: whether the role you are taking is priced as a job at a market rate or as a continuation of what you paid yourself as owner. An owner who gets those three right can negotiate a stay that ends on schedule and on good terms. An owner who gets them wrong is negotiating his own seven-month exit.

• Price the stay as a job at the market rate for the role, not as a continuation of owner pay.
• Expect a buyer to ask for a minimum if the business relies on you, and expect that minimum to be months, not years.
• Write the arrangement so either side can end it. Neither of you can know in advance whether it will work.

The Stay and the Earnout Are One Negotiation

Hartland has a story about the far end of the problem. Twenty-odd years ago, a seller promised to support the transition, took the paycheck and was gone. He moved overseas and disappeared. About a year later he resurfaced, because his follow-on payment had come due. He had not fulfilled any of the obligations he signed up for, and the buyer refused to pay him. It is an extreme case, but it shows the mechanics plainly. Once part of the price depends on the seller's continued involvement, the stay is no longer a courtesy. It is a condition of getting paid, and the length of the stay and the structure of the payout become the same conversation.

That is why the earnout argument at the center of this episode matters to anyone thinking about a transition. Josh has little patience for earnouts. His objection is asymmetry: a seller who has never sold a business, excited by the number, who has not asked about terms early enough, facing a buyer who has done this many times. He objects to a twenty or thirty percent earnout that runs in one direction, all downside for the seller, and he remembers a deal where collecting the earnout quarterly afterward was like pulling teeth. Hartland's defense is that most MSPs in the two to five million dollar range give a buyer real reasons to worry: customers who started on one-year contracts and drifted to month to month, multi-year contracts with a thirty-day cancellation clause that make them month to month in practice, risky industries, and customer concentration, where his threshold is about ten percent of revenue. Faced with that risk, a buyer can lower the price or move the risk into the structure, which is the old rule Hartland quotes: my price, your terms, or your terms, my price. The two of them land in a useful place. Josh's test is that a buyer who needs the earnout to finance the deal is not a qualified buyer, and that an honest buyer should be willing to put two numbers on the table, the total purchase price with the earnout and without it. Hartland adds that a seller should ask a buyer's previous sellers whether they actually received their earnouts, should push for an earnout that cuts both ways, with upside for referrals, new business, a seat in QBRs or help securing a large renewal that is coming due, and should insist that events the buyer controls, such as doubling prices or letting service slip, are boxed out so they cannot reduce the payout.

• Ask every buyer for the total purchase offer with the earnout and without it. The gap between the two tells you what the earnout is for.
• If the earnout is how the buyer pays for the deal, you have become the lender, without any of a lender's protections.
• Tie your upside to the work you will actually do after the close: renewals, referrals, QBRs. A carrot keeps a transition productive in a way a stick cannot.

Interview the Buyer Before You Agree to Work for Them

Josh tells the story of a colleague who buys MSPs, a careful acquirer who has closed three deals and is working on a fourth. When he presents to other MSP owners about how he buys, he describes going to dinner with a seller perhaps ten times before he makes an offer, so that by the time they sign they know each other well. Even so, less than a year after one of those closings, while he was combining two acquired companies in the same market, one of the former owners turned into a nightmare. Hartland's first response is that this cuts both ways. Sometimes the seller is the problem, and sometimes the buyer turns out not to be who the seller thought. Fit cannot be guaranteed, even by ten dinners. But it can be tested, and most sellers test it far too little because they spend the whole process being tested themselves.

In Hartland's view the timing of that test matters. Early in a sale the seller is on the hot seat, answering questions and producing reports, and there is little point in grilling buyers who may drop out for any number of fit reasons: the wrong location, the wrong size, the wrong customers, price points that do not match, too much reliance on the owner, not enough recurring revenue. Once offers and letters of intent arrive, the seller should turn the tables. How will you finance this? What transactions have you done? Can we speak to your references? What happened to the brand, the employees and the customers in the businesses you bought, and what was your churn? A seller who plans to stay should go further and ask the questions anyone would ask before taking a job: who will I report to, what is that person like to work for, what will my day look like, and what do the people who report to that person say when you speak to them confidentially. Hartland's reason for weighting all of this so heavily is a chain he walks through in the episode: fit is mostly about whether the employees will be happy, happy employees serve customers well, well-served customers stay, and retained customers mean retained revenue, which keeps the buyer happy and protects whatever money the seller still has at risk. That is why he encourages sellers to take a slightly lower offer from a better fit over a top offer that may become a nightmare. It runs the other way too. A buyer who is a single owner should bring an advisor into the room as a gut check on the seller, and a buyer whose seller turns difficult after the close should get the knowledge out quickly, shorten the transition and keep only a light arrangement for the occasional question. The Host Broker made its own version of that decision a few years ago and stopped working with difficult people altogether.

• Check a buyer's references the way you would check an employer's, including the people who already report to the person you will report to.
• Ask previous sellers whether they were paid their earnouts. It is the most direct evidence you will get of whether you will be.
• A slightly lower offer from a buyer you can work for is often worth more than a top offer from one you cannot.

Build a Business That Needs You Less

A few days before closing, a friend of Josh's called him with a problem. Hardware as a service made up roughly fifteen percent of his MSP's revenue, and less than a year earlier he had put a hundred thousand dollars into equipment for it. The buyer was going to collect the return on that investment, he had not factored it into the deal, and he wanted to know how to get it back. Josh told him it was tough luck: the equipment is what makes the thing the business makes, and that is part of what a buyer is buying. Hearing Hartland's answer, he changed his mind and conceded that it is not a dumb conversation to have. If gear with twenty-four months of life is only six months into it, factoring that in is fair. Hartland's guidance is to raise it early, ideally before the investment and certainly once a buyer is far enough along to be confident about closing. If the equipment is leased, the buyer simply takes over the payments as part of the cost of serving the customer. If the seller paid up front, an adjustment is reasonable when the amount is material relative to the deal. And the same logic runs in reverse. A seller with ten-year-old equipment may think it will run another ten years, but if it falls outside the buyer's own service standards, the buyer will price the refresh into the offer.

The hardware story is a small version of the whole argument. Every issue a seller has not resolved before going to market becomes something to negotiate from a weaker position, and every function the business still relies on the owner to perform becomes a reason for a longer stay, a larger earnout or a lower price. Asked for the one thing an owner should do if he might sell in the next couple of years, Hartland points to quality of earnings: customers who are profitable, on contracts, paying enough and staying put, in industries with longevity and without much exposure to consolidation or shocks like tariffs, plus new logos to push concentration down. The timing argument makes this more urgent. Josh notes that a large share of today's MSPs were founded between 1999 and 2004, which puts many of their owners near sixty. Hartland sees heavy consolidation, valuations at an all-time high and AI pushing owners who were already considering a sale to accelerate their timelines. In a market like that, the owners who get to choose a short, well-paid transition are the ones whose businesses already run without them.

• Disclose any large investment the buyer will inherit while you still have leverage, not in the last week before closing.
• Move customers onto agreements with real terms, and work any single customer below ten percent of revenue before you go to market.
• The less your company depends on you, the less your stay, your earnout and your price depend on how the first months after the sale go.

Frequently Asked Questions

How long should a seller stay after selling an MSP?

There is no standard term. Buyers usually want the seller to stay as long as possible, but sellers who are retiring typically aim to leave within a year to eighteen months, and a buyer may require a minimum, such as six months, when the business depends on the owner. Josh Peterson's own tally found that most stays ended at about seven months. The right length depends on how much the business still needs you, why you are selling and what the role pays.

Do buyers pay the seller to stay after the sale?

Usually, through an employment or consulting arrangement priced at the market rate for the role, which either side can end if it is not working. Trouble starts when a seller expects pay close to what he took as owner. Hartland Ross describes sellers who earned four or five hundred thousand dollars a year asking for two hundred and fifty thousand to stay, which is far above market for the job.

Should I accept an earnout when selling my MSP?

An earnout moves risk from the buyer to the seller in exchange for a higher headline price. Before accepting one, ask for the total offer with and without it, ask the buyer's previous sellers whether they were paid their earnouts, push for upside as well as downside, and carve out events the buyer controls, such as price increases or service changes. If the earnout is how the buyer finances the deal, treat it as a warning sign.

Is a signed LOI exclusive?

In most deals, yes. Once both sides sign, the seller stops talking to other buyers for an exclusivity period, even though the letter of intent itself is non-binding, and is expected to respect the buyer's diligence effort while meaningful progress continues, often for a minimum of about thirty days. A seller who doubts the buyer can close may insist on a non-exclusive LOI, and buyers commonly ask for a right of first refusal if a later offer arrives.

Should an LOI include a break fee?

Rarely. Hartland Ross sees break fees requested in perhaps five to ten percent of deals, usually in the range of ten to twenty thousand dollars rather than six figures, and they tend to turn into arguments over whose discovery ended the deal. A better protection is having more than one interested buyer lined up before you sign.

What happens to equipment I bought just before selling my MSP?

Disclose it early. If the hardware is leased, the buyer takes over the payments. If you paid for it up front, a purchase price adjustment is a reasonable conversation when the amount is material relative to the size of the deal. The reverse also applies: buyers price in a refresh when a seller's equipment is too old to meet their own service standards.

Episode Highlights

• 00:38 - A client's LOI paid out $200,000 when the buyer walked away, and Josh asks whether that is normal.
• 03:23 - Break fees come up in a small share of deals and usually dissolve into arguments over who discovered what.
• 07:41 - Most sellers deal with a single buyer, and a signed LOI usually brings exclusivity, with rare exceptions.
• 12:51 - The Host Broker lets the market set the price instead of posting an asking price.
• 16:04 - Fit outranks price because happy employees keep the customers that keep the revenue, and the earnout, intact.
• 18:02 - Even a careful serial acquirer can end up with an acquired owner who becomes a nightmare.
• 20:36 - Sellers should reference-check buyers, and buyers should bring a second set of eyes to judge the seller.
• 24:10 - Josh's tally: for years, the longest a seller stayed after a sale was seven months.
• 25:56 - Buyers want sellers to stay as long as possible, if the pay works and either side can end it.
• 29:22 - Cash, a seller note or an earnout, and why the earnout bothers Josh most.
• 31:41 - Hartland's case for earnouts as risk pricing: my price, your terms.
• 32:43 - Month-to-month customers, thirty-day out clauses and concentration above ten percent invite an earnout.
• 35:36 - Josh's rule: ask for the total offer with the earnout and without it.
• 36:26 - Earnouts should reward the seller's help after the close, not only penalize churn.
• 38:12 - Days before closing, a seller realizes the buyer will collect the return on $100,000 he put into hardware as a service.
• 42:49 - Josh concedes that a true-up for equipment with life left in it is a fair conversation.
• 45:44 - Founders who started MSPs between 1999 and 2004 are now near sixty, and an exit wave is building.
• 49:01 - Valuations are at an all-time high, and AI is pushing sellers to move sooner.
• 51:37 - The one thing to do before selling: build quality, predictable, profitable revenue.
• 53:25 - Where to find Hartland Ross and The Host Broker.

About the Guest: Hartland Ross

Hartland Ross is Founder and Managing Partner of The Host Broker, also known as The MSP Broker, a business brokerage for IT service providers based in Vancouver, British Columbia. Since 2005 the firm has helped facilitate hundreds of acquisitions of MSPs, web hosting companies, data centers and other IT services businesses, regularly listing companies from about $100K to $10M in annual revenue. Hartland has worked in the sales and marketing of web-based technology companies since 1999 and has worked with more than 1,000 web hosting companies, MSPs, ISVs, SaaS providers and data centers. He also founded eBridge Marketing Solutions, an online marketing agency for IT service providers.

Connect with Hartland on LinkedIn →

About the Host: Josh Peterson

Josh Peterson is the CEO of Bering McKinley and host of The BMK Vision Podcast. Since 2004, Josh has worked with hundreds of MSP owners to build operationally sound, profitable businesses through consulting, peer teams, and direct coaching.

Connect with Josh Peterson on LinkedIn →

Related Resources from Bering McKinley

• MSP term contracts and client retention: what a renewal date actually buys you
• Sell, scale or pivot: know your numbers first

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