Built to Sell Radio

Garren Hilow bootstrapped Abveris, an antibody discovery business doing $12 million in revenue, and sold it in 2021 for $150 million up front with another $40 million available in an earnout. His team came within one percent of the revenue target. The acquirer said they had missed it, refused to share the accounting behind that conclusion, and dared him to sue. 

Rob Walling sold Drip with 40 percent of his purchase price tied to an earnout and collected all but a fraction of it. 

In this episode of Built to Sell Radio, John Warrillow puts the two founders side by side to work out what actually separated the two outcomes, and you discover how to negotiate an earnout you have a chance of collecting. 

You'll learn: 

Why a revenue-based earnout hands the acquirer the calculator, including the right to change how your revenue is recognized partway through the year 


Walling's ranking of earnout milestones from worst to best, and the one type he tells founders to refuse outright 


Why taking more cash at close makes an acquirer less likely to fight you over the back end 


What a private equity buyer admitted over dinner about how often his firm plans to replace the founder 


The reporting clause Hilow left out of his agreement, and what its absence cost him 


How old Slack messages and a verbal instruction to work from home became grounds for a termination with cause 


Why an acquirer who intends to fold your company into theirs should not be offering an earnout at all

Dane Pan and his wife built Monet Brands to $1.3 million in revenue with two employees, selling a $24.99 skincare tool that cost them $6.10. 

When they took the company to market in 2025, nine buyers cleared the proof-of-funds screen and four of them wrote an LOI. The best offer came in close to four times SDE with a holdback attached. Dane countered for all cash at close, watched two of his four offers disappear, and signed at 3.6

One of the fastest growing groups of acquirers is the self funded searcher. A searcher is not a competitor nor a private equity group. A searcher is usually one person, often recently out of an MBA program, who puts ten to twenty percent down from personal savings, borrows the rest from a bank, often asks the owner to finance part of the purchase price, and signs a personal guarantee for the debt. 

Owners find searchers appealing for good reasons. They may pay your asking price, and they promise to look after your employees rather than fold them into someone else's operation.

In 2016, Janessa White and her business partner started Simply Eloped, a marketplace that planned elopements and small weddings for couples in 35 cities across the United States. They also decided, before they had a single customer, which company they wanted to sell it to. The Knot Worldwide, the largest wedding platform in the world. 

Over the next seven years, White told The Knot exactly that, met with their corporate development team every quarter for four years, and shared her revenue and margins with them along the way. When she finally emailed to say she was ready, the letter of intent arrived within a week.

There are four types of financial buyers who might make an offer on your business, and more often than any other type, the one approaching you is an independent sponsor. It is an unhelpful label for a group that raises the money for a deal only after the seller has signed an LOI, which is also when the seller's leverage is at its lowest. 

Travis Jamison runs Capital Pad, where investors fund independent sponsor deals. He sees dozens of them for every one he approves. Independent sponsors are now behind roughly 28% of lower middle market acquisitions, which is more than traditional private equity does.