Is an Earn-Out the Right Strategy for Your Exit?
Business owners are often divided on this…
Some refuse to consider a deal structure where part of the payment hinges on future performance — they want a clean break and to hand over the reins quickly.
Others, however, actually prefer an earn-out arrangement as part of their exit strategy.
In my experience, earn-outs are particularly useful when there’s a gap between the current valuation and the price the owners hope to achieve at exit.
They can help bridge that gap — but only if the transition phase is managed properly.
To make it work, both sides need to collaborate effectively. The new owners must have a solid growth plan to push the business forward, while the outgoing owners need to remain committed to supporting the transition.
The key is to agree on crystal-clear terms and ensure you’re comfortable with both the risks and potential rewards.
#NextLevelGrowth #ExitLaunchpad #EarnOut
