seller-protection-with-an-earnout 
Benchmark Report
MARCH 7, 2022
Earnout Agreements have become increasingly routine in deal structures over the last several years as they are most widely used during times of political and/or economic uncertainty. The earnout payment is additional compensation paid in the future to the seller after the business is sold. to be excluded from the calculation.
Viking Mergers
MAY 19, 2022
Receiving the entire purchase price in cash at closing is, of course, the most straightforward and preferred option for the Seller. But there are business transaction structures where only part of the purchase price will be paid in cash, and the remainder will be paid via a Seller Note and/or an Earnout. What is an Earnout?
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IBG Business
AUGUST 21, 2023
A powerful tool in negotiating a business’s purchase price, an earnout can bridge the gap between the amount that a buyer is willing to pay and the seller is willing to accept. Most sellers see maximum profit potential, while most buyers see risk and past earnings. You might be right, but we’re not so sure. See “Terms” below.)
Harvard Corporate Governance
JUNE 16, 2023
Coates, IV, Darius Palia, and Ge Wu; and The New Look of Deal Protection (discussed on the Forum here ) by Fernan Restrepo, and Guhan Subramanian. Even in deals that ultimately do not include CVRs, they are frequently being discussed behind the scenes by buyers and sellers as a way to address a lack of alignment on valuation.
Viking Mergers
JUNE 14, 2022
the seller and the buyer). Because the seller is receiving consideration in the form of cash at closing, sometimes a seller note, sometimes retaining/purchasing some equity in the new company, and potentially an earnout. We don’t normally see Cash because this is often retained by the seller.
Viking Mergers
JULY 28, 2022
Because he knows what it’s like to be the buyer, he knows what attracts a buyer to a business; but even more, he can also empathize with what the sellers are working through, and he understands what matters to them when looking for a buyer. With a father in the United States Air Force, Ian Schinelli moved around a lot as a kid.
IBG Business
FEBRUARY 6, 2024
Helping the seller anticipate and negotiate issues that can cause deviations from the expected sale proceeds can add unexpected value to involving an experienced M&A intermediary. In a business sale, forewarned is forearmed. They don’t fully understand where the funds went.
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