Low Offers with Earnouts based on Increases in Revenue

When someone comes in with a low upfront offer with a tier based earnout, we respond in kind with gratitude but a quick response.

We appreciate the efforts.

But the reality is we communicate succinctly that the seller won’t let it go for the offer.

And when breaking it down it’s all about what it takes to get a deal done.

Which is a matter of understanding the true valuation and the multiple of EBITDA.

If they are offering less than a reasonable multiple based on the current status the offer should be rejected unless the seller needs to get our.

If the offer goes up to a more realistic multiple but only if the business grows substantially, in some cases a multiplier of more EBITDA production, then the buyer needs to be brought to reality here.

If the business does 3x more production for instance, and the value is $5mm it will be worth $5mm not $5mm. Let’s understand this piece to it. Growing the business will result in a higher valuation. That’s not baked in to any deal and winning a seller over.

Enclosed are some valuations to consider but these are a bit higher than what takes place on the street.

https://www.equidam.com/ebitda-multiples-trbc-industries/

https://microcap.co/valuation-multiples-for-tech-software-companies/

You want to offer a solid offer in cash upfront.

Many businesses we list are not being let go for anything near under a reasonable multiple of EBITDA.

The buyer can flip the business tomorrow if the seller were to.

Be more strategic with your earnout terms.

If the business grows 3x, the business should be worth 3x of a normal valuation based on what it is being valued at now.

You can have revenue milestones, but EBITDA is something generally viewed negatively by the seller’s broker and seller, because you can simply squeeze the seller out of with just hiring a consultant or two.

We want you to secure the business you want, as opposed to just squeezing a good deal out of something that’s a maybe.

You want a good LOI to help you. Happy to discuss on a call. Thanks.

Please reach out to us if you have any questions relating to acquisitions:

Email – [email protected]

Phone – (800) 773-1523

Simply engage us below to get started whether it comes to bringing you qualified buyers where we list your business for maximal value or engaging us to bring qualified and vetted businesses that match your exact target criteria such as industry and EBITDA multiple if you are buying a business:

Buyer-Side Engagement – Retain Us to Provide you with Qualified and Vetted Businesses that Match Your Target Criteria

Seller-Side Engagement – Retain Us to List Your Business and Bring Legitimate Buyers to the Table

Leader in Acquisitions with Expertise in Representing Sellers & Buyers on Deals

Jarbly is a leader in acquisitions with expertise in helping with listings, negotiations, LOI's, asset purchases, company purchases, and real estate purchases. JARBLY has access to high net worth individuals if you are on the sell-side and businesses that may be of interest to you if you are on the buy-side.

Contact Us

Phone: (800) 773-1523
Email: [email protected]

About Jarbly

JARBLY’s focus is on acquisitions, predominantly businesses with valuable assets and cash flow. As JARBLY has been heavily involved in the digital space including its own ventures for a decade with servicing hundreds of clients around the world, it is very well versed with understanding technical aspects of a deal including value proposition, product offerings, marketing, metrics, ROI, moats, and value-add initiatives. JARBLY has the ability to take advantage of all aspects of a business deal, and is very creative with structure to help bring in partners or plan a strategic exit. JARBLY has helped brands cultivate business related and real estate opportunities that are ripe for acquisition by helping buyers and sellers get what they are seeking from a deal.

Whether it comes to selling your business, acquiring one or forging a partnership opportunity, we understand deals and where the maximal value in a transaction is. Our bread and butter is to provide a win for our clients. We have the unique and uncanny ability to leverage our network and our sources of distribution to go out to the public to position your assets for a maximum sale. We draft and prepare materials such as prospectuses, Confidential Information Memorandums, and high quality Value Proposition Decks which convey a message of value to attract high quality offers in the shortest time possible.

JARBLY looks forward to working with you on your next acquisition, digital exit, partnership, or real estate opportunity including both commercial and high end residential properties with high end service from a qualified team of passionate individuals that help you secure the deal.

We know how to curate high quality listings and attract high net worth individuals interested in your deal.

We know how to generate traction on a listing through means of marketing openly or discretely, and we have thousands of high net worth individuals who we have developed relationships with to draw interest on a daily basis. While many firms focus on creating barriers to sell your business out of fear of wasting time, we have protocols in place to get as many offers as possible to help drive up the valuation and the proceeds. On the flip side, we know how to structure deals creatively for our buyers to help them feel secure.

Please take a look at our process to get a sneak peak into how we help our buyers and sellers maximize the deal.

Low Offers with Earnouts based on Increases in Revenue