The Earnout Trap What Every Business Seller Needs to Know

Lucas and Luna revisit the earnout — a common deal structure that promises a higher sale price but often backfires. They break down why earnouts fail, using the cautionary tale of a software company founder who lost millions after missing revenue targets due to a key client's departure. The hosts explain the mechanics, the psychology, and how sellers can negotiate smarter earnout terms to protect themselves. This episode draws on broker data showing that nearly 40% of earnouts result in no additional payout, and offers practical advice on setting realistic milestones and avoiding common pitfalls. A must-listen for anyone considering selling their business or structuring a deal with contingent payments. #Earnout #BusinessSale #MergersAndAcquisitions #SellerBeWare #PrivateSale #BusinessBroker #DealStructure #PostClosing #RevenueTargets #EBITDA #ExitPlanning #OwnerFinancing #BusinessValuation #Negotiation #RiskManagement #Business #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo