The Earnout Trap How Buyers and Sellers Split the Risk

The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators · May 23, 2026 · 12m · transcript

When a company gets acquired, the upfront check isn't always the whole story. Earnouts — contingent payments tied to future performance — have become a fixture in middle-market M&A, but they're surprisingly easy to mess up. Lucas and Luna break down how earnouts actually work, using the $1.3 billion acquisition of HubSpot CRM reseller Growsari by a private equity-backed rollup as their central case. They walk through the typical 30 to 40 percent earnout threshold, the three earnout structures (revenue, EBITDA, and product-milestone), and why over 40 percent of earnouts never pay out…