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Performance-Based Earnouts

Performance-Based Earnouts allow business owners to sell their business at a higher price by agreeing to receive payments after the sale based on the company’s performance over time.

At EINBF, we help sellers structure earnouts in a way that aligns future earnings with business performance metrics, ensuring a fair payout based on growth and success after the transaction.

As part of the Enterprise Industry Network, we bring expertise in structuring deals that protect both the seller and buyer while aligning incentives for long-term success.

Performance-Based Earnouts
EINBF Core Values
  • Custom Deal Structuring
  • Trust & Transparency
  • Speed & Precision in Deal Execution

Aligning Seller Incentives with Buyer Success

Performance-Based Earnouts ensure both parties benefit from the continued success of the business after the transaction.

Incentivizing Growth

Earnouts motivate sellers to continue driving the business’s growth post-sale, benefiting from performance targets.

  • Performance milestones linked to payout
  • Ensures seller engagement after sale
  • Better sale price with success-based terms
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Deferred Payments

Performance-based earnouts allow sellers to receive a portion of the sale price over time, based on post-sale performance.

  • Defer a portion of the sale price
  • Linked to performance goals
  • Strategic seller payout structure
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Success-Based Metrics

Earnouts are based on clear, measurable performance metrics, ensuring both parties are aligned in the business’s continued growth.

  • Revenue or EBITDA-based performance
  • Agreed-upon KPIs for payout
  • Aligning buyer and seller goals
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Aligned Incentives

Earnouts provide a bridge between seller and buyer interests, ensuring both are incentivized for business success.

  • Buyer and seller interests aligned
  • Post-sale growth as key to payout
  • Long-term business sustainability focus
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Performance-Based Earnouts FAQs

Performance-based earnouts are contingent on achieving certain business goals after the sale, with payments made based on performance targets.

Earnouts allow sellers to secure a higher sale price and reduce risk, while buyers gain assurance that the business will continue to perform after the transaction.

The structure of an earnout depends on performance metrics such as revenue, profit, or specific milestones, and must be mutually agreed upon by both parties.
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