Sell Your Business for Public Stock: Full Acquisition, Partial Exit, or Minority Stake

Most business acquisitions are simple: buyer writes a check, seller walks away.

That works. But it’s not the only way to structure a deal, and for some sellers, it’s not the best way.

Onfolio is a publicly traded holding company (ONFO, listed on Nasdaq) that acquires and operates profitable online businesses. We’ve completed seven acquisitions at an average of 3.3x annual cash flow, and the portfolio now generates over $575,000 per quarter in operating profit, up from $50,000 in early 2023.

Our previous deals have used a mix of cash, preferred stock, seller notes, and co-investor capital. Going forward, we’re also offering sellers the option to receive ONFO common stock as part or all of the consideration. This page explains how that works and why some sellers prefer it.

Why Stock Instead of Cash

Three reasons.

First, it’s better capital allocation. Cash spent on one acquisition can’t be spent on the next. Stock lets us acquire businesses without depleting the cash the portfolio generates, which means the company reaches self-funding faster and every existing business in the portfolio benefits.

Second, it creates alignment. When a seller holds ONFO shares, they’re invested in the same portfolio their business just joined. If the portfolio grows and the stock reflects that, they participate in the upside. It’s not just a transaction; it’s a partnership.

Third, it widens the deal funnel. Some of the best businesses aren’t on the market because the founder doesn’t want a traditional exit. A founder whose business is still growing isn’t going to sell 100% for cash. But they might sell a minority stake for stock. That gives us access to higher-quality businesses that would otherwise never be available, and it gives the founder liquidity and diversification without interrupting what’s working.

For investors, this matters because every stock-for-business transaction adds real, cash-flowing assets to the portfolio without requiring external financing or burning operating cash. The shares issued are backed by the acquired business’s earnings.

Three Ways to Structure a Deal

We don’t have a one-size-fits-all model. Every seller’s situation is different, and the structure should match.

Full acquisition

We acquire 100% of the business. The seller receives ONFO stock (plus cash where needed for tax obligations or as part of the negotiated structure). The business joins our portfolio and operates under the Onfolio umbrella. We’ve done this seven times. The seller can walk away completely or stay on in an operating role.

Majority acquisition

We acquire 51-90% of the business. The seller retains a meaningful stake and typically continues running operations. This works well for founders who want significant liquidity but aren’t ready to fully exit. They get diversification through ONFO shares while keeping skin in the game on the business they built.

Minority stake

We acquire 10-40% of the business. The founder keeps full operational control and the majority of ownership. They receive ONFO stock as personal diversification without changing anything about how they run the business. For founders whose net worth is concentrated in a single asset, this is a way to de-risk without selling. And for founders still actively growing, it’s a way to take chips off the table without stepping off the gas.

We see minority deals as the beginning of a relationship, not a one-time transaction. Many founders who start with a minority sale eventually consider a larger transaction once they’ve seen how the partnership works.

What We Look For

We acquire profitable online businesses: digital agencies, online education platforms, eCommerce, and small software companies.

The common thread is stable, recurring cash flow. We’re not looking for high-growth startups burning cash. We want businesses that generate real profit and will continue to do so under our ownership.

Typical profile:

Annual profit of $200K-$2M
Operating for 3+ years
Established revenue with low customer concentration
Owner willing to accept stock as primary consideration

We pay fair multiples. Our seven acquisitions have averaged 3.3x annual cash flow. We’re not trying to buy businesses at distressed prices. We want sellers who feel good about the deal and, in many cases, stick around.

The Stock Price Question

If you look up ONFO, you’ll notice the stock hasn’t performed well. That’s a fair concern, and I’d rather address it directly than pretend it doesn’t exist.

Here’s what I’d ask you to look at beyond the stock chart.

The portfolio businesses generate $575K+ per quarter in operating profit, up from $50K in 2023. Cash distributed from the portfolio to the parent company has gone from $200K/quarter to $700K/quarter. Parent company operational costs have dropped 35%. The company is approaching the point where portfolio cash flow covers all parent expenses, which means self-funding operations and organic growth from there.

The stock price hasn’t reflected this yet. That’s how micro-cap stocks work sometimes, especially ones with limited trading volume and a GAAP income statement that includes large non-cash charges from acquisitions. The data underneath tells a different story.

I’ve published the full breakdown with charts at onfolio.com/path-to-profit. If you’re evaluating whether ONFO stock has value as consideration for your business, that’s the page to read.

Cash for Taxes

Stock-based transactions can create taxable events. We understand that and work with sellers to structure deals that account for tax obligations. In many cases, a portion of the consideration is cash specifically to cover the seller’s tax liability. The goal is a structure that works for both sides, not one that creates a financial burden for the seller.

Next Step

If you’re interested in exploring any of these structures, fill out the form below. No commitment. We’ll schedule a conversation to understand your business and discuss what might make sense.

For investors: I wrote a free guide on the math behind serial acquisition, including why we can offer full valuations using stock and still generate strong returns.