Key-person risk and know-how transfer in M&A
The firm changes hands. The momentum stays.
We capture the founder's know-how before the sale and keep it working for the business after closing, so that key relationships, pricing and judgement stay with the firm rather than leaving with the seller. We deliver this through two products: the Succession Twin and the Transition Twin.
Built to work alongside sell-side and buy-side advisers, private equity and corporate acquirers, across Europe and internationally.
Where revenue, pricing and critical relationships depend on one individual, acquirers protect themselves through a lower multiple, a larger earn-out or holdback, and an extended seller transition period. Confirmatory due diligence slows, and transactions are re-traded or abandoned.
Illustrative: with key-person risk mitigated, a larger share of the price is paid in cash at closing.
Illustrative structure, not a forecast.
Key-person discount accepted by US courts in valuation cases. Practitioners apply up to 25% where dependence on one individual is high.
Typical seller transition period after closing. Private-equity buyers commonly ask for 12 to 24 months, strategic buyers for 6 to 12.
of private-target transactions (outside life sciences) in 2025 included an earn-out. Across deals with an earn-out, roughly one in five earn-out dollars is ultimately paid.
The Succession Twin and the Transition Twin
During due diligence, the Succession Twin is the owner's guide: the acquirer's team submits questions and receives answers referenced to source documents and interviews. After closing, the Transition Twin carries the same knowledge forward as a companion to the new management, anticipating commitments and advising on decisions with reference to how the founder handled comparable situations.
Decision authority remains with management at all times.
The assessment and the two twins, from seller preparation to post-merger integration.
Structured interviews with the founder and senior team, combined with an analysis of revenue concentration, pricing practice and critical relationships. The output is a key-person risk score and a remediation plan, completed before the information memorandum is released. An optional Decision Capture module follows the founder's day-to-day operations and records the reasoning behind each significant decision.
The owner's guide, compiled from structured interviews, correspondence, quotations and contracts, and made available within the virtual data room. Every answer is referenced to its source, so confirmatory due diligence depends less on the founder's availability.
An AI companion that supports the new management from Day 1 and through integration. It anticipates commitments and advises on decisions, doing for the founder's know-how what a transition services agreement does for shared services.
The Succession Twin is made available within the seller's virtual data room, beside the documents it cites. The acquirer's team uses it there, under the same non-disclosure agreement as the rest of the data room.
| No. | Folder | Files | Updated |
|---|---|---|---|
| 01 | Corporate | 24 | 12 Nov 2026 |
| 02 | Financial | 61 | 20 Nov 2026 |
| 03 | Commercial | 48 | 19 Nov 2026 |
| 04 | Human resources | 19 | 10 Nov 2026 |
| 05 | Legal and contracts | 37 | 18 Nov 2026 |
| 06 | Operations and IT | 22 | 9 Nov 2026 |
| 07 | Real estate and permits | 14 | 24 Nov 2026 |
| 08 | Tax | 17 | 13 Nov 2026 |
| 09 | Owner's guide: Succession Twin | 149 | 24 Nov 2026 |
| 09.1 | Ask the Succession TwinEach answer cites its sources · 64 answeredSources: 242 documents · 6 interviews · 142 decision records | Open | |
| 09.2 | Interview transcripts | 6 | 16 Oct 2026 |
| 09.3 | Decision records | 142 | 23 Oct 2026 |
| 09.4 | Source register | 1 | 24 Nov 2026 |
Four jobs for the new management, each drawing on the knowledge captured before the sale.
Account B is requesting an 8% reduction for next year. How should we respond?
With sources. The exchange is shown above, under Transition Twin · post-closing.
Account A's framework agreement renews on 18 March. The founder sent the proposal six weeks ahead.
Open below, in the window.
Brief for the price indexation review with Account A's purchasing lead: history, open points, what the founder agreed in 2024.
For Tue 19 Jan, Day 16.
Founder relationships introduced to the managers taking them over.
Next: the owner of the principal steel supplier, in April.
Every answer, warning and brief cites the records it comes from.
5 of 41 commitments in the first 117 days, each one the founder handled personally
Each deliverable, the stage it belongs to and who receives it.
Key-Person Risk Assessment, Succession Twin and Transition Twin
| No. | Deliverable | Stage | For | Form |
|---|---|---|---|---|
| 1 | Key-Person Risk Assessment report | Seller preparation | The seller, the adviser | Written report with the score |
| 2 | Heat map of the ten dimensions | Seller preparation | The seller, the adviser | Table in the report |
| 3 | Remediation planWith owners and deadlines | Seller preparation | The seller, the adviser | Table in the report |
| 4 | Key-person section for the information memorandum | Seller preparation | The adviser, for prospective acquirers | Text and table for the IM |
| 5 | Decision recordsOptional Decision Capture module, one to three weeks | Seller preparation | The seller | One record per significant decision, each approved by the founder in writing |
| 6 | Succession TwinThe owner's guide | In due diligence | The seller, for the acquirer | A folder in the virtual data room |
| 7 | Source register | In due diligence | The seller, for the acquirer | One register in the same folder, listing every source the answers cite |
| 8 | Re-score of the key-person risk | Before signing | The seller and the adviser, for the acquirer | Updated score and status of each action |
| 9 | Transition TwinAnswers, commitments, meeting briefs, relationship handover | From Day 1 through integration | The new management | AI companion, each answer with its sources |
The seller engages us for items 1 to 8; the acquirer engages us for item 9, after closing.
Decision Capture runs only with the founder's written consent.
Ten dimensions, each assessed for exposure and replaceability, and weighted by the share of revenue or EBITDA at risk. The result is a single score, a heat map and a remediation plan with owners and deadlines. The assessment is re-scored before signing.
A sample report for an invented company, Project Atlas.
| Dimension | What we assess | Atlas |
|---|---|---|
| Customer relationships | Concentration and personal ties to key accounts | High |
| Pricing and commercial judgement | How prices, discounts and margins are set | High |
| Supplier and partner terms | Informal arrangements outside the written contracts | Medium |
| Operational know-how | Tacit process and technical knowledge | Medium |
| Management depth | Second-line capability and delegation | High |
| Documentation and systems | What is written down, current and accessible | Medium |
| Financing and guarantees | Bank relationships and personal guarantees given by the founder | Medium |
| Licences and permits | Authorisations and qualifications held personally by the founder | High |
| Change-of-control clauses | Contracts that lapse or require consent on a sale | Low |
| Reputation and network | Referrals and industry standing tied to the founder | Medium |
Sample exposure levels from the Project Atlas assessment. Invented company.
| Action | Dimension | Owner | Deadline | Status | Score |
|---|---|---|---|---|---|
| Introduce the sales director to the purchasing leads of Accounts A, B and C; hold the Q4 meetings jointly | Customer relationships | Sales director | 15 Nov 2026 | Done | −5 |
| Write the pricing and discount rules into a pricing policy approved by the board | Pricing and commercial judgement | CFO | 20 Nov 2026 | Done | −4 |
| Put the 60-day payment terms of the principal steel supplier into the written contract | Supplier and partner terms | CFO | 31 Oct 2026 | Done | −2 |
| Delegate approval of quotations above EUR 50,000 to the sales director | Management depth | Founder | 15 Nov 2026 | Done | −1 |
| Name a second qualified manager on the business permit | Licences and permits | Operations manager | 25 Nov 2026 | Done | −2 |
| Negotiate the release of the founder's personal guarantee with the bank | Financing and guarantees | CFO | At closing | Open | At closing |
Optional module of the assessment
Interviews record what a founder says they do. Decision Capture records what they actually do. With the founder's written consent, an AI module follows the founder's day-to-day operations for one to three weeks and documents each significant decision: what triggered it, the information considered, the options weighed, the steps taken and the reasoning behind the outcome.
The decision records give the key-person risk score an evidential basis and become core material for the Succession Twin.
We operate within your process. We do not accept sell-side mandates and do not compete with advisers.
The assessment gives the IM a section of its own: the score, the dependencies behind it and how each one is being mitigated. Acquirers see the mitigation before they price the risk.
The founder holds the principal customer relationships and sets prices for the three largest accounts, 41% of 2025 revenue. A remediation plan with owners and deadlines is under way, and the assessment will be re-scored before signing. In the data room, the Succession Twin answers acquirers' questions with a source for every answer.
| Dependency | Exposure | Mitigation |
|---|---|---|
| Accounts A, B and C, 41% of 2025 revenue | High | Sales director to be introduced to each purchasing lead; joint quarterly meetings from Q4 2026 |
| Pricing and discount rules | High | Pricing policy to be approved by the board; past decisions recorded in the owner's guide |
| Approval of quotations above EUR 50,000 held by the founder | High | Approval to be delegated to the sales director |
| Business permit in the founder's name | High | Second qualified manager to be named on the permit |
| 60-day terms with the steel supplier, not in the contract | Medium | Terms being written into the supply contract |
Confidentiality first. No acquirer access before a non-disclosure agreement is executed.
Founder-approved sources. Every source is approved by the founder in writing.
Consent-based capture. Decision Capture runs only with the founder's written consent, for one to three weeks. Meetings are recorded only when every participant has agreed.
Data protection. Processing is designed to comply with the GDPR. The transfer of personal data to the acquirer is governed by the SPA.
Aborted transactions. Should the transaction not complete, all material is returned or deleted, within the retention limits set out in the engagement letter.
Founded by David Reinig, formerly M&A adviser at Tenzing Partners. Built for the question that decides the sale of an owner-led company: what happens when the owner or another key person, such as a C-suite executive, leaves?
A vendor due diligence report describes the business at a point in time. The Succession Twin allows the acquirer to interrogate the founder's know-how directly during due diligence, and the Transition Twin continues to support management after closing.
Over one to three weeks, and only in channels the founder selects: email and calendar, summaries of key events from business systems and the CRM, meeting notes and the decisions taken, and recordings of meetings where every participant has agreed. It records how decisions are made. It is not used to monitor employees.
No. It is designed to reduce how far either is needed, by keeping the founder's know-how within the business.
No. It provides advice together with its reasoning and sources. Decision authority remains with management.
On the sell side, the seller engages us for the assessment and the Succession Twin. On the buy side, the acquirer engages us for the Transition Twin after closing.
We use Mistral AI's EU service for AI processing, and client material is not used to train AI models. Where client material is stored, and which providers handle it, is set out in the engagement letter.
Owner-led companies, from family businesses to the mid-market, where critical relationships and know-how rest with one individual.
We are based in Luxembourg and take on transactions across Europe and internationally.
An initial conversation is enough to gauge the key-person risk in a target and how it can be addressed.
