How to structure an earn out to align incentives

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by a searcher from University of California, Davis
in Wheaton, IL, USA

1yr ago

How to structure an earn out to align incentives

Hey yall,

I'm about to put in an offer for a service business with around 2M in revenue and I'd like to include an earnout or another vehicle to align our incentives over the medium term,

What have you experienced? What has worked and what hasn't? My goal is for the sellers to get the full asking price for their business while incentivizing them to remain and assist with transferring relationships and training.

Thanks!

1 Like

157 Views

reply by a lender 1yr ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

The other option you have here is to do a seller note with forgiveness in it. That is allowed under the SBA rules. Happy to talk through that option with you. You can reach me here or directly at redacted

reply by a professional 1yr ago
in Windermere, FL 34786, USA

Here is a guide to contingent notes that we prepared at SMB Law Group: redacted