earn out
An "earn out" is a financial arrangement often used in business acquisitions where additional compensation is tied to future performance.
Definition
C1Mergers and Acquisitions
(technical, finance)A pricing structure where part of the purchase price is contingent on the acquired business meeting specific performance targets after the sale.
Example
- The acquisition deal included an earn out clause based on the company's revenue growth over the next three years.
B2Business
(general)A financial arrangement where the seller qualifies for additional money if the business achieves certain performance goals.
Example
- The founder received an earn out after the startup hit its sales targets.
C1Authorship
(publishing)To make enough money from a book to cover its advance and advertising costs.
Example
- The author was thrilled when her book earned out in the first year.
Similar
Terms that have similar or relatively close meanings to "earn out":
pay outcash outpay offpencil outterm outage outbuy outend outcount outeke outprice outplay outedge outqualify outreckon outtop outlive outearn one's keepturn a profitcash inwork offforce outlose outout of pocketprove outpan outhave outclose outmax out