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How Founders Use Structured Earnouts to Close Valuation Gaps
In episode 113 of The Startup Exit Podcast, Lucas and Luna dive into the world of structured earnouts—a mechanism that bridges valuation gaps between buyers and sellers in M&A. They examine a recent example where a $2 billion AI drug discovery startup used earnouts to align incentives post-acquisition, drawing on market data showing how earnouts can mitigate risk. The hosts discuss the typical structure, common pitfalls, and why earnouts are becoming more prevalent in 2026 as dealmaking heats up. They also touch on how earnouts differ from other bridging tools like contingent value rights…
The skinny
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