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
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