Earnouts

Latest Earnouts Articles

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  Sale Process

  Pitfalls Around Earnouts (and Why They Rarely Payout)

  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

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  Sale Process

  Like Rodney Dangerfield, Earnouts Just Don't Get Any Respect

  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

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  Valuation

  Company Valuations and Why They're the Wrong Metric for Business Owners

  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

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  Sale Process

  The ABCs of Earnouts

  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

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  Sale Process

  Earnouts: The Double-Edged Sword for Sellers

  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

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  Maximize Value

  Podcast: Why Your Digital Services Business Should Be Run Like a Restaurant, an Interview with Kasim Marucchi

  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

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  Pre Sale

  To Grow or Sell Your IT Company - A Crossroads Decision

  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

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  Sale Process

  Earnouts or Burnouts: Don't Get Burned on an Earnout

  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

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  Maximize Value

  11 Reasons to Use Earnouts in the Sale of Your Company (Part 2)

  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)...

  By: Dave Kauppi

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  Maximize Value

  11 Reasons to Use Earnouts in the Sale of Your Company (Part 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...

  By: Dave Kauppi

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  Valuation

  For High-Tech M&A, Strategic Value is Not Automatic

  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...

  By: Dave Kauppi

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  Sale Process

  In a Business Sale, the Buyer Has the Upper Hand (Part 3)

  In parts one and two of this article series, we discussed the natural experiential advantages that a business buyer's team would bring to the table in a business sale...

  By: Dave Kauppi