Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
How the Earnout Cap Trap Sabotages SaaS Sellers
Episode 55 of The Acquisition Talk dives into one of the most underappreciated deal destroyers in software M&A: the earnout cap trap. Lucas and Luna walk through a real 2024 SaaS deal where a $12 million earnout was capped at $3 million because the buyer buried a revenue-stack cap in the schedule. They explain how to spot caps hidden in definitions of 'net revenue' and 'recurring revenue,' and why sellers negotiating uncapped earnouts often leave $10 million on the table. Specific case: a B2B analytics platform that hit 140 percent of its earnout target but got only 60…
The skinny
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