09/07/2026
Imagine closing the sale of your business on December 31, 2019.
Your earnout begins the next morning.
Then 2020 happens.
The seller who misses a target is not always the victim of a predatory buyer. Sometimes, it is the economy, supply chain, interest rates, a lost customer, or a disruption no one could have reasonably predicted.
That is the underlying reality of an earnout: some of the purchase price remains at risk after the business is no longer fully under the seller's control.
Earnouts can help sellers reach full value and help buyers manage uncertainty. But they require clear metrics, careful drafting, realistic expectations, and strong legal and accounting advice.
Understand what you can control.
Understand what you cannot.
And understand what it could cost to learn the difference after closing.