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Recapitalization is a change in a company's capital structure, which can vary based on motivation. There are three types of transactions: full recapitalization, majority recap, and minority recap. A full recap involves selling 100% ownership, often when owners are ready to retire. Senior management may co-invest to benefit from future growth. A majority recap allows owners to retain control while selling part of the company, providing liquidity and enabling personal wealth diversification while limiting investment risk. This strategy appeals to owners wanting to maintain operational involvement while still extracting value from their investment.