Those who sold (or bought) a SaaS with seller financing / earnout — how do the monthly payments actually work?
I'm researching how post-close payments really work in micro-acquisitions. Every exit write-up covers the negotiation and the closing, but nobody talks about what happens during the 12–24 months after, when part of the price is paid over time.
If you've been on either side of a deal like this, I'd love to hear:
- How is the monthly amount calculated — fixed installments, or a % of revenue?
- What's the actual routine? Who checks the numbers, who reminds whom, how does the money move?
- Has there been any friction — late payments, disagreements about the numbers, radio silence?
My guess from the conversations I've had so far: it's mostly spreadsheets and trust. Curious whether that matches your experience or I'm off.
Not selling anything — genuinely trying to understand if this is as messy as it looks before deciding whether it's worth building for.
If this must be written into the purchase agreement, the product boundary is the calculation schedule. Each earnout needs a versioned metric definition, source data, monthly statement, buyer and seller sign-off, dispute window, and carry or offset rules. A dashboard without those contract edges only makes the spreadsheet prettier.
I like that you're validating the operational reality rather than assuming the paperwork is the product.
If most deals really do run on spreadsheets and trust, the interesting question isn't whether software can replace that. It's whether the friction becomes painful enough, often enough, for both sides to want a shared system instead.
That's exactly the open question I'm trying to measure — how often the friction actually bites. My working hypothesis after talking to a buy-side verification guy: you don't sell the shared system after the pain shows up (getting two already-fighting parties to adopt anything is hopeless), you get it written into the purchase agreement at closing, like escrow — when both sides are motivated by symmetric fear rather than actual pain. Curious if you've been through a deal with deferred payments yourself, or seen the friction up close?
Good question.
The reason I asked wasn't really about my own experience. It was something your reply made me think about, and I don't think I could explain the reasoning properly in a thread without oversimplifying it.
If you're open to it, what's the best email to reach you on?