How the Indemnity Escrow Cap Traps Small Sellers in M&A

Episode 58 of The Acquisition Talk digs into one of the most overlooked deal-killers for small-business sellers: the indemnity escrow cap. Lucas and Luna walk through a real 2023 case where a $12 million SaaS exit turned into a $3.8 million clawback because the cap was tied to the full purchase price instead of the deal size. They explain how the standard 10-15 percent escrow can balloon when earnout targets are missed, how buyers use the cap to extract post-close concessions, and why first-time sellers almost never negotiate the cap language. Specific countermoves include a sliding-scale cap tied to revenue milestones and a hard-dollar cap that can't exceed escrow. A focused episode for operators who think the deal is done once the letter of intent is signed. #MergersAndAcquisitions #BusinessPodcast #FexingoBusiness #TheAcquisitionTalk #IndemnityEscrow #EscrowCap #SmallBusinessExit #SaaSExit #EarnoutTrap #PostCloseClawback #DealNegotiation #SellerProtection #MiddleMarketM&A #PurchasePriceAdjustment #RevenueMilestones #HardDollarCap #RepsAndWarranties #BusinessSales Keep every episode free: buymeacoffee.com/fexingo