http://www.business-sale.com/blog/selling-a-business/22/earnouts-key-issues-to-consider Business Sale Report Sat, 22 Nov 2008 08:45:37 +0000 http://wordpress.org/?v=2.3 http://www.business-sale.com/blog/selling-a-business/22/earnouts-key-issues-to-consider#comment-113 websiteproperties Fri, 23 May 2008 03:50:10 +0000 http://www.business-sale.com/blog/selling-a-business/22/earnouts-key-issues-to-consider#comment-113 I have structured several earn-outs for my clients selling internet businesses. Typically these deal structures work well when the buyer is strong - financially and experiencially so the potential for reaping a greater reward on the backside is much greater. Secondly, we base it on 5% of gross revenues not net - This is easy to track and prove and can lead to a nice quarterly or bi annual bonus check over the course of 3-4 years - the usual term and pay schedule. These deals are usually negotiated when a buyer is unable or willing to pay all cash at close or the buyer doesn't want owner financing. I have structured several earn-outs for my clients selling internet businesses. Typically these deal structures work well when the buyer is strong - financially and experiencially so the potential for reaping a greater reward on the backside is much greater. Secondly, we base it on 5% of gross revenues not net - This is easy to track and prove and can lead to a nice quarterly or bi annual bonus check over the course of 3-4 years - the usual term and pay schedule.
These deals are usually negotiated when a buyer is unable or willing to pay all cash at close or the buyer doesn’t want owner financing.

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