Moving the money somewhere safe

On my first sale, the money hit the account and my very next thought was that I needed to move it.

Not invest it. Not put it to work. Move it. Somewhere safe. My reasoning, to the extent I had any, went something like this: if there's a fight later, and the money isn't sitting where it landed, then the money is harder to reach.

I want to be plain about what that instinct actually revealed. It wasn't shrewdness. It was a clear sign of someone who did not understand how a business sale works, and who had not fully understood his own purchase agreement.

The buyer already solved this problem

Here is the thing I hadn't absorbed: a sophisticated buyer does not structure a transaction on the assumption that you will hand money back when asked.

They assume you won't want to. They build for it. Depending on the deal, that can mean an escrow or holdback that never reaches you in the first place, personal guarantees from you standing behind the indemnity obligations, representations and warranties that survive closing and give them a claim, and in larger deals an insurance product sitting behind those representations.

Every one of those mechanisms exists precisely because the buyer anticipated a seller in exactly my frame of mind.

And if you have an earnout or rollover equity, it's worse

This is the part that really exposes the whole idea.

If your deal includes an earnout, or rollover equity, or a seller note, then the buyer is already holding money that is yours. It hasn't been paid yet. It's scheduled.

So when a dispute arises, they don't need to come find your bank account. They don't need to sue you. They don't need a judgment. They exercise a right of setoff that you agreed to in the purchase agreement, and the next payment simply doesn't arrive — or arrives smaller.

My agreement gave me a window measured in days, not weeks, to deliver money that was determined to be owed before other consequences attached. That's my deal, not a universal rule, and yours will read differently. But the structure is common enough that you should assume something like it applies to you until you've confirmed otherwise.

Where I had physically parked my cash was, in that scenario, entirely beside the point.

The Texas wrinkle that makes this instinct worse, not better

Texans hear a lot about how protective this state is — the homestead exemption, protected retirement accounts, the general reputation of Texas as a good place to be a debtor. Some of that reputation is earned.

None of it helps you here, for a simple reason: a contractual setoff against money the buyer hasn't paid you yet doesn't involve a judgment, a court, or a collection effort. There's nothing for an exemption to protect you from. The buyer isn't reaching into anything. They're just not reaching out.

And there's a second problem with acting on the instinct. Texas has the Uniform Fraudulent Transfer Act, in Chapter 24 of the Business and Commerce Code, which exists to reverse transfers made to put assets beyond a creditor's reach. A transfer can be attacked as fraudulent where it was made with intent to hinder, delay, or defraud a creditor — and the factors courts weigh include things like whether the debtor had been sued or threatened with suit beforehand, and whether the transfer was concealed.

Which is to say: shuffling money around because you're worried about a claim you can see coming is not a neutral act. It can become its own separate problem, on top of the one you were worried about. If you have any question about your own situation, that's a conversation for your attorney, not for an article.

The mistake that actually costs money

Now here's the one that's less obvious and, in my experience, more expensive.

Suppose an amount is determined to be owed back to the buyer, and you have both cash and rollover equity. It can feel efficient to let the rollover equity absorb it — you keep your cash, they take back some paper, everyone moves on.

Look closely at how your rollover equity gets valued for that purpose. In my agreement it was anchored to the fair market value as of the sale date. Not current value. Sale-date value.

Think about what that means if the company has done well since closing. Six months or a year on, that equity is worth meaningfully more than it was the day you signed — but it's being credited against your obligation at the old number. You surrender something worth a dollar to discharge fifty cents of debt. Or twenty-five.

In that situation, paying with cash was the cheaper option by a wide margin, even though every instinct said to protect the cash and give up the paper.

Run your own numbers, because your valuation mechanism may work differently and your tax picture certainly will. But run them before you're asked, not while a deadline is running.

What actually protects the money

The instinct to protect your proceeds is a sound instinct. The method I reached for was useless and potentially harmful.

What actually protects the money is knowing, before it ever lands, what you might owe, under what circumstances, on what timeline, and in what currency. That information is not hidden. It's in the purchase agreement, in the sections most sellers skim on the way to the number.

Read those before the wire, not after.