PrivateTechSharesEarn-out
Also called: earnout
In one line
Part of an acquisition price paid only if the acquired business hits agreed future targets.
In plain English
In many deals, some of the purchase price is held back and paid later, contingent on performance. For shareholders, it means part of your proceeds depends on hitting milestones after the sale.
If you were explaining it to a 5-year-old
The buyer pays some coins now for the toy club, and promises more later — but only if the club keeps making great toys.
Why it matters when you sell
An earn-out means not all of an exit's value is guaranteed or immediate, which matters when comparing it to selling shares now.
Related terms
Put it to use
When you're ready to go deeper, there's an optional Equity Toolkit and Report.
Sources
A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.
Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.