A bought deal is a type of financial agreement where the investment banker handling the initial public offering (IPO) of a company agrees to buy the entire IPO for a certain sum of money. In this deal, the financial risk for the company is greatly reduced as the amount of money it plans to raise… View Full Term
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An earnout is a financing arrangement for the purchase of a business in which the seller finances a portion of the purchase price, and payment of this amount is…
By: George Deeb
Imagine that you're a psychologist for a second. Mr. Earnout walks into your clinic. You have been seeing Mr. Earnout for three years now. In fact, your clinic is…
By: Erick Hamdan
There are volumes of well-written published books, college courses, various professional accreditations, business seminars, webinars, software and an infinite number of…
By: Scott Yoder
What’s an earnout? An earnout is that portion (generally 10–35%) of the purchase price for an acquired business that is contingent upon the business…
By: Jey Arul
When a business is finally sold and the cash delivered to its owner, it represents a pinnacle moment; it’s the triumph after a hard-fought ascent. For some, it…
By: Nate Nead
About the HostRyan is an entrepreneur, podcast host of the show Life After Business and the co-owner of Solidity Financial. Having personally experienced the hazards of…
By: Ryan Tansom
Owners of software companies with a great new product are often frustrated by their inability to gain broader market acceptance. The problem isn't the product, the…
By: Dave Kauppi
Earnout clauses are becoming more and more common in purchase and sale agreements, especially in a volatile economy or where the target company’s earnings have…
By: Peter Ferrari
In part one, I listed six out of the 11 reasons why a technology (or other) business owner should consider an earnout as part of his/her sale transaction structure: 1)…
The purpose of this article is to present earnouts to sellers of technology companies as a method to maximize their transaction proceeds. Sellers have historically…
Wow did I get a real world demonstration of the saying, "Beauty is in the eyes of the beholder," recently. If I could rephrase that to the business sale situation it…
We posed the following question across our social media sites: "What is a common range of deferred payment as a percentage of enterprise value (i.e. seller's note or…
By: Divestopedia Team
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