The buyer is proposing an earnout based on strict post-close integration goals, but our leadership team consists of highly entrepreneurial builders. How do we structure this earnout to match their natural working styles?

Question

Tyler Smith · Accepted Answer

An earnout structured around rigid, bureaucratic milestones is a recipe for disaster when your leadership team consists of entrepreneurial builders. If you force high-momentum innovators into a highly structured corporate integration box, they will quickly burn out, miss their targets, and leave money on the table.

To avoid this, assess your team's natural problem-solving profiles using the Kolbe Index and the Enneagram. If your key leaders have high Quick Start energy on the Kolbe Index, they thrive on experimentation, innovation, and rapid scaling. On the Enneagram, they may align with Type Seven, the Enthusiast, or Type Eight, the Challenger. These personalities struggle when forced to follow slow, administrative checklists.

Renegotiate the earnout targets so they are tied to high-level growth and profitability metrics rather than administrative integration milestones. Instead of penalizing the team for not adopting the buyer's corporate systems on a specific timeline, focus the earnout on net new revenue, customer retention, or EBITDA goals.

Give your team the operational autonomy to hit these numbers their own way. In the purchase agreement, secure covenants that protect their operational independence during the earnout period. They must retain the authority to run their Level 10 Meetings™ and set their own quarterly Rocks. By protecting their entrepreneurial ecosystem, you allow them to use their natural talents to drive the growth that both you and the buyer want.