Earn-outs in Business Sales
What sellers need to know about variable purchase price components: structures, contract clauses, risks, and negotiation levers at exit.
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Table of contents
Chapter 1
What is an Earn-out?
Why earn-outs arise in M&A transactions
Base purchase price, earn-out amount, and measurement period
How sellers and buyers share future performance risk
Chapter 2
Structures, Clauses and Examples
Metrics, payout structures, and key contract clauses
EBITDA-based earn-out worked examples
Protecting against post-closing EBITDA manipulation
Chapter 3
Risks, Negotiation and Conclusion
Loss of control, measurement disputes, and payment risk
Practical negotiation tips for sellers
When an earn-out is — and is not — sensible
Here's what founders and advisors say
Sophie van der Berg
CEO @ VDP Partners
“I read this before our first advisor meeting, and it completely changed how we approached the deal structure.”
About the authors
Thomas Eriksen
Partner @ Northvane
Transaction advisor focused on mid-market PE exits across DACH. Has structured deal terms on 30+ transactions over the past decade.
James Whitford
Partner @ Northvane
Corporate finance specialist with a background in cross-border M&A. Advises founders on governance, rollover mechanics, and post-exit positioning.
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