Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The M&A Earnout Accounting Trap That Cost a Founder $1.2 Million
In this episode, Lucas and Luna dissect a lesser-known M&A trap: the earnout accounting structure that can shift millions in payout based on how the buyer books revenue. They walk through a real 2025 case involving a B2B SaaS company, Coalesce Analytics, where the founder lost $1.2 million because the acquirer recognized multi-year subscriptions as month-to-month for earnout calculation purposes. Lucas explains the difference between ASC 606 and the earnout definition of 'net new sales,' and why sellers need to define revenue recognition methodology in the definitive agreement. Luna…
The skinny
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