Earnout - Seller note - Equity proportion

by an investor from INSEAD

1 year ago

Dear All,

Is there a general rule of thumb for buyout terms? What percentage is generally upfront? How much is the seller note? How much is earn out?

I understand one should max it out, but still curious what you can use as argument as general market practice?

Let's say 100 is the equity value,
50 is upfront
25 is seller note
25 is earnout?

0 likes
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21 comments

searcher from Harvard University - Harvard Business School

Good discussion - thanks for asking the question.

5 months ago | like reply | 0 likes

intermediary from University of San Diego

Agreed and understand both parties have their own agendas. If is is a good fit and a good alignment then there should be mutually agreeable terms.

8 months ago | like reply | 1 like

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