Requiring all your money up front doesn’t always get you the best overall outcome when selling your business. To maximize the outcome, it often helps to agree to a performance based earnout.

Many business sale transactions are structured with earnout provisions, particularly in the mid-size business market. There are many reasons why building in an earnout structure might be mutually beneficial.

In this video we’ll explain what an earnout is and run through the 5 main benefits of having an earnout structure as well as 5 potential downsides you should consider.