AmiSight 7/15: Freedom Has Value Too
I recently read an interesting Inc. article by Bruce Eckfeldt about the mistake he believes he made after selling his company. Instead of taking all the value at closing, he accepted a multi-year earnout worth more than $1 million. He walked away in less than six months.
His story isn't really about earnouts. It's about control.
On paper, an earnout can increase the purchase price. In reality, it often means tying your future to decisions someone else will make. Your payout depends on goals you may no longer control, while your time, energy, and attention remain locked into a business you've already decided to leave.
I see similar tradeoffs all the time in lending and business negotiations. Entrepreneurs naturally focus on the headline number—the purchase price, the interest rate, the valuation. But sometimes the most valuable thing you're negotiating isn't money. It's flexibility, certainty, and the freedom to move on.
Those things rarely show up on a term sheet, but they have real value.
It's a good reminder that the best deal isn't always the one with the biggest number. Sometimes it's the one that gives you the most control over what comes next.
Comments