Peter Vander WallFounder driving creative community growth

Why sellers say yes to an earn out

Name: Why sellers say yes to an earn out
Uploaded: 2025-08-02T17:00:31+00:00
Duration: 34 s
Channel: Peter Vander Wall
Description: Short YouTube clip (creator: Peter Vander Wall) explaining why sellers accept earn-outs and how to make earn-outs attractive to buyers. Key tactics…

2 Aug 2025 · 1 min

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0:34

Short YouTube clip (creator: Peter Vander Wall) explaining why sellers accept earn-outs and how to make earn-outs attractive to buyers. Key tactics: offer the seller upside on revenue from new clients or cross-selling existing clients (seller receives a percentage while buyer handles sales/marketing). Also notes that sometimes sellers must accept an earn-out because the business is unsellable after loss of key personnel.

Chapters

How do you incentivize the buyer to agree to a earn out versus Seller financing it? You can incentivize them by giving them upside in the either the new clients or the cross sell of existing services. So if I have a list of clients that I think are good fits for other higher end services, I can offer the seller a percentage of that. They don't have to do any work like that's my job to market to them and to sell them a higher service. Or they just don't have a choice straight up like the business is not sellable for whatever reason, key like employee or key partner left, the business could not be sellable and therefore they don't have a choice but to do an earn out.