Episode from the podcastBuilt to Sell Radio

Ep. 61 How To Structure Your Earn-Out

Released Wednesday, 21st September 2016
Good episode? Give it some love!
An earn out is a way to bridge the gap between what you want for your business and what a buyer is willing to pay. In an earn out, a portion of the sale price of your business is set aside for payment in the future if you reach certain goals the acquirer sets for your business. You’ll need to stay on for a few years  as an employee of the acquiring company to lead your team to hit the earn out goals.
Most owners would prefer all of their cash the day they sell their business and most buyers would prefer to pay the entire amount contingent on future performance. Deals get done in the middle where some portion of your money is paid up front with another slice available if you meet your goals as a division of the acquiring company.
Traditional earn outs are typically tied to the profitability of your company as a division of your new owner and they are fraught with problems. Buyers may thwart you ability to hit your number in any number of ways.  In this episode of Built to Sell Radio, you’ll hear from Mac Lackey, a veteran entrepreneur who took an alternative approach to structuring his earn out which put up to 80% of the sale of his company, Kyck.com, at risk.
You’ll learn the surprising approach Lackey took to structuring his earn out to maximize his shot at hitting his number.

Episode Reviews

This episode hasn't been reviewed yet. You can add a review to show others what you thought.

This podcast, its content, and its artwork are not owned by, affiliated with, or endorsed by Podchaser.
Rate Episode

Share This Episode

Recommendation sent

Join Podchaser to...

  • Rate podcasts and episodes
  • Follow podcasts and creators
  • Create podcast and episode lists
  • & much more

Moderator Stats

Podcast ID

Episode Details

48m 8s
Episode Type

Episode Tags

Do you host or manage this podcast?
Claim and edit this page to your liking.