Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
How Earnouts Misalign Seller and Buyer Incentives
This week on The Acquisition Talk, we examine the structural tension in earnout agreements where buyers control the post-close metrics while sellers bear the risk. Using a specific mid-market software acquisition case study, Lucas and Luna break down why performance-based payouts often lead to disputes rather than shared success. We explore how strategic adjustments in deal structure can align interests without trapping founders in unmanageable targets. This is a deep dive into the mechanics of M&A compensation that affects every operator considering a sale.
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The skinny
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