How to Spot a Toxic Earnout in 60 Seconds (Before You Sign the LOI)?

How to identify a toxic earnout in 60 seconds (Before signing anything): I've watched earnouts destroy $50M+ deals. Not because the structure was complex. Because buyers used them as escape hatches and sellers signed without reading the fine print. Here's what toxic earnouts look like: 1️⃣ Vague performance metrics "Revenue growth" without defining baseline, attribution rules, or what counts as revenue. 2️⃣ Buyer controls everything They set budgets, pricing, and client access while your payout depends on hitting targets they can quietly sabotage. 3️⃣ No dispute resolution clause When disagreements arise (and they will), you're stuck negotiating with zero leverage. 4️⃣ Long payout windows (3+ years) The longer the earnout, the more variables can derail it. Anything beyond 24 months is a red flag. 5️⃣ All-or-nothing thresholds Miss the target by 1%? You get nothing. That's not alignment. That's a trap. One check you can do today: Ask your attorney to mark every clause where the buyer has unilateral control. If it's more than two, renegotiate or walk. Earnouts aren't inherently bad. But bad earnouts cost you years of stress, lkely litigation, and money you already earned. Don't let urgency override due diligence. 👇 What's the worst earnout clause you've seen? Drop it below. I'm building a study.