How To Structure Your Earn-Out (Without Getting Burned)

Kristin Delwo co-founded Stacks, a software used by librarians.  Though the software was still early in its life, Delwo wanted to scale quickly and decided to look for a deep-pocketed acquirer.  Delwo was too early in her life-cycle to attract an all cash offer so agreed to sell her business putting much of her consideration “at risk” in an earn-out.

In this episode, you’ll learn:

  • The biggest mistake to avoid when structuring your earn-out contract
  • How to value a company when you’re buying out an existing partner
  • The best way to get buy-in from employees when moving from a consulting to a product-based company
  • The one strategic reason Delwo chose to partner with EBSCO instead of building her own sales force
  • The one fundamental decision Delwo made to set herself up for success in the sale

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Kristin Delwo approached her business exit with a flexibility.  She was willing to accept different options because she knew it would help her company scale.  Having Structuring Flexibility is a key driver of ensuring a personally satisfying exit.  Find out how personally ready you would be if you exited your business tomorrow.  Take your free, 5-minute PREScore™ questionnaire now.


If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.