Earn-outs — provisions giving the seller of a business additional consideration if the business hits certain performance benchmarks — can be a win-win for both business buyers and sellers. Earn-outs can provide a source of funds for business buyers that can save a deal that otherwise couldn’t close, and they can provide a method for buyers to share risk with sellers.

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Article by: Robert Adel, Litigation Shareholder, Greenberg Traurig