What Is an Earn-Out? How Owners Get Paid on the Growth They Helped Build
An earn-out sounds like the buyer keeping their hand in your pocket. Structured right, it's the opposite — it's how you get paid for the upside you're leaving on the table.
An earn-out means part of your payment depends on how the business performs after the sale. Instead of one fixed number, you get a base amount plus additional payments tied to hitting revenue or profit targets over a defined period.
Why an earn-out can be good for the seller
If your business is growing — or could grow with the right owner — an all-cash buyer prices in today's numbers and pockets tomorrow's upside. An earn-out lets you share in that future value.
We structure earn-outs so you get a minimum amount or a percentage of the growth we create, whichever is higher. Since we're the ones bringing AI and marketing in to grow the business, the target isn't a hurdle we hope to clear — it's the whole plan.
How to protect yourself
- Define the metric precisely (revenue vs profit — profit can be engineered).
- Set a realistic period — long enough to be fair, short enough to be certain.
- Get visibility into the books during the earn-out window.
- Have a floor — a guaranteed minimum so you're never left with nothing.
Earn-outs pair naturally with seller financing and a stay-and-earn role, where you can actually influence the result you're being paid on.
Curious what your exit could look like?
Tell us a little about your business and we'll put together a free, private exit analysis — what it may be worth, where it could grow, and how a deal on your terms (often with nothing down) might work.
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