Who’s in control of your earn out?
September 22, 2026 •
| “I wasn’t sophisticated enough to make that deal on my own.” That’s what one business owner said after selling their business. Because they ended up losing $3 million on an earn out because they didn’t have the right representation. Or even a full understanding of what they were getting themselves into. Buyers are shrewd and they often have teams of people working on an acquisition. They’ll probably know more about buying and selling businesses than the business owner. Which means, if you don’t have the right information and advisors on your side, you might get taken for a ride. See, what can happen is a shrewd buyer might require the business owner to stay on for an “earn out,” a period during which they’ll need to hit specific financial goals to get their full purchase price. But what if the buyer controls the financials? Can you be sure you’re getting a square deal? This is one of the reasons why it’s so important to have the right advisory team behind you, who have been here before. What we can do is give you an education on how businesses are valued, how Search Funds work, how Private Equity works, and what’s within your control and what isn’t. So that when that check arrives, or you get that Letter of Intent, you know what you’re getting and what it’s really worth. At the end of the day, we have three goals: 1) We want you to know what your business is truly worth 2) We want you to know how much it would take to fund your lifestyle 3) And we want you to be able to say, “I got what I needed.” If you’re exploring a sale, or it’s even on the radar, it’s not too soon to talk to us. We can help you make sure you know what to expect, and what you need to get for all of this to be worth it. Selling your business can be a long journey, so you’ll want someone on your team (and coordinating your team of advisors) that’s been through this before and knows what to look for. So you’re able to say, “I got what I needed,” instead of, “I didn’t know what I was getting myself into.” -Jason |
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HFM Investment Advisors, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. All investments involve risk and are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as a recommendation appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.
