Why Earnouts Are Failing in 2026 Deals

In this episode of The Acquisition Talk, Lucas and Luna dissect the growing failure rate of earnout provisions in M&A deals as of May 2026. They focus on a recent high-profile case: the acquisition of a cloud security startup by a large enterprise software firm, where the earnout triggered litigation because the acquirer deliberately slowed product development. Lucas explains how earnout structures can create misaligned incentives between buyer and seller, and why more dealmakers are turning to 'fixed earnout' alternatives. The hosts also share practical tips for sellers negotiating earnouts, including how to tie milestones to controllable actions rather than revenue targets. The episode closes with a look at the broader trend: earnout usage has surged 40% since 2020, but so have disputes. Lucas and Luna offer a clear-eyed view of when earnouts work and when they're a trap. #Earnouts #MergersAndAcquisitions #MADeals #PrivateEquity #StrategicBuyers #CloudSecurity #EarnoutDisputes #FixedEarnout #MALitigation #BusinessPodcast #FexingoBusiness #AcquisitionTalk #SellersAdvice #BuyerBehavior #DealStructure #PostMergerIntegration #VentureCapital #DueDiligence Keep every episode free: buymeacoffee.com/fexingo