“You can create a contingent seller note ... if this larger client churned for any reason, there would be some mechanism to not pay out the rest of that note”
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Said on Acquiring Minds
Acquiring Minds · The $150k Hiding in the Business He Bought
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Avoided a seller note/earn-out in the purchase despite typical SBA expectations
“You can create a contingent seller note ... if this larger client churned for any reason, there would be some mechanism to not pay out the rest of that note”
“When we first started… most of it was distressed sellers… over the last 10 years… majority of what we’ve been purchasing… giving gains to investors.”
“They disclosed it… 55 in cash and 36 earn out… earn out is tied to revenue plus EBITDA… milestones counted every six months”
“We do run an annual investment plan… one-year horizon for risk positioning… five-year horizon… we have a portion of the portfolio that’s in illiquid assets… need the right buffer to avoid forced seller.”
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