Earnout Structure

This question tests whether you understand contingent consideration in an acquisition and how it is used to bridge a valuation gap between buyer and seller. In interviews, bankers want to see that you can explain the commercial logic, the contractual structure, and the way future payments are tied to agreed performance targets over a defined period. It also checks that you understand why earnouts appear in deal discussions, since they are often used when the parties disagree on value or when the buyer wants to limit upfront cash while keeping the seller incentivized after closing.