How M&A Deals Now Price Earnout Duration

In this episode of Tech M&A with Fexingo, Lucas and Luna unpack a shift that's quietly reshaping software deal terms: the length of earnout periods. Once a standard two-year earnout was nearly automatic; now buyers are pushing for three- or even four-year earnouts tied to specific milestones like recurring revenue retention or AI model performance. Lucas walks through a recent mid-market SaaS acquisition where the earnout stretched to 36 months, and how that affected the seller's negotiating leverage. They discuss why longer earnouts are becoming the norm for AI-heavy targets, how they affect founder retention, and what the data from recent Q2 2026 deals shows about average earnout durations. Lucas cites a specific example from the cybersecurity space, referencing CISA's recent challenges to illustrate why buyers are demanding more time to verify product claims. If you're a founder or acquirer navigating software M&A, this episode offers actionable insight into one of the most negotiated lines in the deal sheet. #TechM&A #EarnoutDuration #SoftwareAcquisitions #StrategicBuyers #FounderRetention #AIDeals #CybersecurityM&A #SaaSDeals #MileStones #DealTerms #MidMarketM&A #BusinessAndTechnology #CISA #RecurringRevenue #Valuation #FexingoBusiness #BusinessPodcast #TechDeals Keep every episode free: buymeacoffee.com/fexingo