# Holding period

The number of years between buying a business and selling it.

A return is a rate, not a total, so the same gain is a different answer at four years than at ten, and that rate is what an investor is solving for before a price is agreed. It also decides what the paperwork has to survive: a [seller note](https://searchspheresource.com/glossary/seller-note) amortizing over seven years outlives a five-year hold and has to be settled out of the sale, and a [preferred return](https://searchspheresource.com/glossary/preferred-return) compounds every year the hold runs. [Searchers](https://searchspheresource.com/glossary/searcher) who plan an exit plan the hold first, because almost every other number moves with it.

In numbers: A business bought for $5M and sold for $15M is 3x either way: about 32% a year over a four-year hold, and about 12% over a ten-year one.

Source: https://searchspheresource.com/glossary/holding-period
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt