In my recent post, Earn-Outs: Distributing Risk, I provide a high-level description of how an earn-out works. While in they are quite simple, these structures can make it difficult for unprepared entrepreneurs to get their fair payouts.

One of my mentors, Jed Katz, has lots of his experience as both an operator and investor. During his time as an entrepreneur, he learned a few tactics that can help entrepreneurs increase their chances of maximizing their payouts.

I'll cover the the top-four ways to avoid being burned by an earn-out in the ensuing posts.

1. Base Earn-Outs On Simple Metrics
2. Base Earn-Outs On Metrics You Can Control
3. Ensure Access To Resources
4. Keep The Earn-Out Period Short