Private Equity & Exit Opps
What is an earnout, why is it used in PE deals, and what are the classic problems with it?
Model answer
An earnout defers part of the purchase price, payable only if the business hits agreed post-close targets (revenue, EBITDA, milestones) over a set period. It's used to bridge a valuation gap — the…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 2,000+ — or go Pro for unlimited reps.
More from Private Equity & Exit Opps
- At a high level, how does private equity recruiting differ from investment banking recruiting?
- What's the difference between on-cycle and off-cycle PE recruiting?
- Should an IB analyst go on-cycle or wait for off-cycle? What are the real trade-offs?
- What role do headhunters actually play in PE recruiting, and why are they called gatekeepers?
- How should you prepare for and handle the headhunter intro call?
- What should you tell headhunters about your fund preferences — and why does consistency matter so much?