Protecting Your Earnout

Selling a business is one of the most significant financial events an entrepreneur will experience, and earnout provisions can have a major impact on the final value received. This podcast explores how Canadian business owners can protect themselves when a portion of the purchase price depends on future EBITDA performance. Listeners will gain practical insights into the risks of earnout structures and the strategies that can help safeguard their interests before signing a share purchase agreement.Throughout this episode, we cover the key contractual protections every seller should negotiate, including operating covenants, clear EBITDA calculations, governance rights, acceleration triggers, payment security, dispute resolution, and the evolving duty of good faith under Canadian law. We also discuss common pitfalls that can reduce earnout payments and how experienced advisors help structure agreements that minimize unnecessary risk.Whether you are preparing to sell your business, advising clients on mergers and acquisitions, or simply looking to better understand earnout negotiations, this episode provides practical guidance to help you approach the process with greater confidence and clarity.Explore more insights, guides, and resources at www.Shaughnessy.GroupYou're listening to The Shaughnessy Group Podcast—insights on buying, selling, and growing Canadian businesses in the lower-middle market.Let's begin. Thanks for listening. If you're finding these episodes helpful as you think through your exit, there's another resource we want to mention.We've put everything we know about selling a Canadian business into a book—Selling Your Canadian Business: A Step-by-Step Guide to Maximizing Value and Securing Your Legacy.It covers the full journey, from preparing your company for sale, to navigating due diligence, to negotiating deal terms that protect  This podcast is for informational purposes only and is not professional advice. Consult qualified advisors for your specific situation.Important Notice: These podcast notes are unofficial summaries created for personal reference and educational purposes only. They are not intended as a verbatim transcript, official record, or endorsement by the podcast hosts, guests, or producers of Shaughnessy Group. While every effort has been made to capture key insights, quotes, and discussions accurately, errors, omissions, or interpretations may occur due to the subjective nature of summarization. Listeners are strongly encouraged to refer to the original episode for full context, nuances, and original audio.No Advice Provided: The content discussed in Shaughnessy Group episodes, including these notes, does not constitute professional, financial, legal, medical, or investment advice. Any ideas, strategies, or opinions shared by guests are their own and should not be relied upon without independent verification and consultation with qualified professionals.Copyright & Usage: All rights reserved. These notes are derived from publicly available podcast episodes and are shared under fair use principles for non-commercial, transformative purposes. Reproduction, distribution, or commercial use without permission from the podcast creators is prohibited.For questions or permissions, contact the Shaughnessy team directly. Enjoy the learning, but always do your due diligence!