How to Structure an Earnout That Actually Protects Sellers

The Buyer & Seller Podcast with Fexingo: Business Brokers, Exits, and Private Sales Explained · May 28, 2026 · 6m · transcript

Earnouts are supposed to bridge valuation gaps, but most favor buyers. In this episode, Lucas and Luna walk through a real earnout structure used in a $40 million ad agency sale: how the seller tied 60% of the earnout to gross profit retention and 40% to new client revenue, with a three-year measurement window and a no-cap upside clause. They explain why earnout targets must be based on normalized EBITDA—not revenue—and why sellers should demand a 'most favored nation' clause preventing the buyer from changing the business model mid-earnout. Plus, a specific carve-out that let the…