How do earn-outs work when buying a consulting or agency business?

Seller wants part of price tied to future revenue. Is that fair for buyers?

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Zubair Hadir 2 months ago

Earn-outs can align incentives when revenue depends on the seller. Protect yourself with clear definitions (what counts as revenue), audit rights, and limits on seller competition.

If you will change the model heavily, earn-outs get messy — prefer a lower fixed price.

Related: earn out business acquisition, buying agency earnout structure

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