Earn out considerations & language

by a searcher from Duke University - The Fuqua School of Business

4 years ago

I'm looking for ways to structure an earn out. In particular, I'd like to review approaches that include both financial and non-financial (customer/employee retention, key hire, etc.) criteria. Appreciate if you could send language used to --@----.com  what situations would one use an earn out versus a seller note forgiveness. Finally, what are some consideration one would take into account for the duration of the earn out. Thanks.

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searcher from Harvard University - Harvard Business School

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4 months ago | like reply | 0 likes

searcher

To Karen’s point, and others- you could have your outside pros draft a forgivable seller note as a portion of the PP. Meaning, if the business hits certain thresholds, the note is paid, if it doesn’t, the note is forgiven. Doesn’t mean you avoid the pitfalls of EO’s entirely, but could be a better middle pillar approach.

11 months ago | like reply | 0 likes

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