Should I take an earnout or cash up front?
Short answer
Cash at closing is certain. An earnout pays later only if targets are met, often after you no longer control the business. More cash up front usually means less risk for you.
What to know
- Earnouts can bridge a gap between what you want and what a buyer will pay.
- Targets and how they are measured matter a lot.
- Rollover equity is a different bet on the buyer’s success.
What to do next
- 1Model the deal at different outcomes.
- 2Negotiate clear, measurable targets.
- 3Weigh the certainty of cash.
Last reviewed September 2026 by the Horizon team. General information, not legal, tax or financial advice.