How the Earnout Cap Trap Sabotages SaaS Sellers

What this episode covers

Episode 55 of The Acquisition Talk dives into one of the most underappreciated deal destroyers in software M&A: the earnout cap trap. Lucas and Luna walk through a real 2024 SaaS deal where a $12 million earnout was capped at $3 million because the buyer buried a revenue-stack cap in the schedule. They explain how to spot caps hidden in definitions of 'net revenue' and 'recurring revenue,' and why sellers negotiating uncapped earnouts often leave $10 million on the table. Specific case: a B2B analytics platform that hit 140 percent of its earnout target but got only 60 cents on the dollar. Hard lessons on negotiating earnout formulas, annual vs. cumulative caps, and the one clause you need if the buyer insists on a cap. #EarnoutCap #SAASM&A #AcquisitionTalk #DealStructuring #MergersAndAcquisitions #BusinessPodcast #Business #FexingoBusiness #MADeals #EarnoutTrap #SaaSExit #RevenueStackCap #Negotiation #MAAwareness #MiddleMarketM&A #SellerProtection #DueDiligence #LucasAndLuna Keep every episode free: buymeacoffee.com/fexingo

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Frequently Asked Questions

How long is this episode of The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators?

This episode is 7 minutes long.

When was this The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators episode published?

This episode was published on June 16, 2026.

What is this episode about?

Episode 55 of The Acquisition Talk dives into one of the most underappreciated deal destroyers in software M&A: the earnout cap trap. Lucas and Luna walk through a real 2024 SaaS deal where a $12 million earnout was capped at $3 million because the...

Can I download this The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators episode?

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