Search Fund Probability-Weighted Earnout Solver

Underwrite structuring performance-contingent seller earnouts bridging valuation gaps while discounting future contingent liabilities at private equity hurdle discount rates.

Earnout Milestones & Probabilities

Maximum Contractual Seller Earnout Pool ($ - e.g. $1,500,000)

Target Milestone Achievement Probability (% - e.g. 65%)

Buyer Target Discount Rate (% IRR - e.g. 14%)

Risk-Adjusted NPV & Valuation Save

Probability-Weighted Expected Earnout Payout

$975,000 Expected Contingent Payout

Risk-Adjusted Net Present Value (NPV) at Closing

$658,103 Discounted Liability

Immediate Upfront Purchase Price Equity Saved

+$841,897 Upfront Cash Saved