Earnouts
Hi guys,
Would you know of any good/exhaustive source of info on how to best structure earnouts and Management Incentive Programmes?
Thanks
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structure upon revenue, ebitda, and free cash flows. Comes into play 2/3/5 years from now. No right / wrong approach but important to take free cash flow into account.
Size the earn out such that you are returns positive if the relevant benchmark is hit, and the max amount you’d ever be willing to pay (in a negotiation) is roughly returns neutral.
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