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Definitions from the Web

Term: Earnout

Definition: An earnout refers to a contractual agreement in which the seller of a business is paid additional future payments based on the business's performance after it is acquired.

Senses:

1. Noun: A financial arrangement wherein a portion of the payment for the sale of a business is contingent upon achieving certain predetermined targets.

Example Sentence: The acquisition was structured with an earnout formula, ensuring the former owner a larger payout if the company's revenue increased by 15% within the next two years.

2. Verb (Transitive): To receive payment for services rendered or work completed.

Example Sentence: The freelancer expected to earn out a significant sum after completing the project ahead of schedule.

3. Verb (Intransitive): To bring in or generate income or revenue.

Example Sentence: Their innovative product proved to be a great success, earning out millions of dollars in just a few months.

Related Products:

• Mergers and Acquisitions
• Selling a Business
• Entrepreneurship