Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The Valuation Adjustment Mechanism Explained
Most founders think a purchase price is fixed once the term sheet is signed. In reality, the real money often moves after closing through a Valuation Adjustment Mechanism, or VAM. This episode dissects how VAMs work in private equity deals and why they can silently erase millions in value for sellers who don't understand the trigger conditions. We look at a specific case where a tech company lost fifteen million dollars because its customer churn metric was defined too narrowly. Lucas breaks down the mechanics of these adjustments while Luna explores the strategic implications for…
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