Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
How the Indemnity Escrow Cap Traps Small Sellers in M&A
Episode 58 of The Acquisition Talk digs into one of the most overlooked deal-killers for small-business sellers: the indemnity escrow cap. Lucas and Luna walk through a real 2023 case where a $12 million SaaS exit turned into a $3.8 million clawback because the cap was tied to the full purchase price instead of the deal size. They explain how the standard 10-15 percent escrow can balloon when earnout targets are missed, how buyers use the cap to extract post-close concessions, and why first-time sellers almost never negotiate the cap language. Specific countermoves include a sliding-scale cap…
The skinny
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