When an owner hears an offer for their agency, the first number that sticks is the multiple. It's the wrong number to fixate on. Two offers at the same multiple can put very different amounts in your account — and on very different dates — depending on how the price is paid.
Most agency deals are built from some mix of five parts. Here's what each one means for you as the seller.
This is the portion paid when the deal completes. It's the most certain money in the deal and carries the least risk for you: once it's wired, it's yours. When you compare offers, start here — the share of the price paid at closing tells you more about an offer than the headline multiple.
An earnout is a future payment tied to how the book performs after the sale — usually retention, growth or earnings over one or more years. Earnouts let a buyer pay more in total while sharing the risk that clients leave after you do.
The questions to ask are practical: What exactly is measured? Over what period? Who controls the things that drive the number once you no longer run the agency? An earnout you can't influence is closer to a hope than a payment.
With seller financing, part of the purchase price is paid to you over time. In effect, you're lending the buyer that part of the price. Look at the term, the interest rate, what happens if payments stop, and whether the note is secured.
Some buyers — particularly larger acquirers and platforms — pay part of the price in equity in the buying company. That gives you a share of any future upside when the buyer grows or is itself sold, but it comes with more risk and less liquidity than cash. It suits owners who believe in the buyer and don't need all of the value right away.
A slice of the price may be held back for a period after closing to cover disputes or discrepancies that turn up later. Know how much, for how long, and what can trigger a claim against it.
Deal structure is one of the most common reasons owners ask us for a second opinion on an offer they already have. If that's where you are, choose "Have an offer — want a second opinion" on the form. There's no fee to you.
This article is general information about how agency deals are commonly structured. It isn't legal, tax or accounting advice — review any offer with your own advisers.
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