The multiple was fine. The earn-out was three years.

Owner dependence rarely shows up as a lower valuation. It shows up somewhere far less visible, and by then it is difficult to argue with.

By Steve 5 min read
Abstract bridge artwork for The multiple was fine. The earn-out was three years.

Owners who have sold a business tend to remember the multiple. It is the number that gets repeated at dinner, and it is the number that felt like the negotiation. But the multiple is only one term in a deal, and in owner-managed businesses it is frequently not the term that determines what the seller actually receives. Consider the pattern. A buyer arrives, does its diligence, and comes back with a headline figure close to what the owner hoped for. Then the structure appears: a portion at completion, a portion…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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