Glossary
Earn-out
Part of the purchase price depends on how the company performs after the handover. This helps when the buyer and seller value the company differently. The criteria need to be set out very clearly in the contract.
Related termSeller Loan (Vendor Loan)The previous owner defers part of the purchase price, and the successor pays it back in instalments from the company's earnings.Next Read moreFinancing a business succession: How to pay for the takeover.Next
FAQ
Frequently asked questions
What is an earn-out?
Part of the purchase price depends on how the company performs after the handover.
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