Earn-out

Payments made to the Seller contingent upon future performance metrics of the business. This is a way for the Buyer to ensure the business is able to continue to scale post-transaction. The performance metrics can vary, but are typically based off revenue or EBITDA numbers from your upcoming year projections.

The timeline of an earn-out period is dependent upon the Buyer, but your M&A advisor will negotiate these terms on your behalf.