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 lifecycle 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 salesforce
- The one fundamental decision Delwo made to set herself up for success in the sale