Deal Structure

Contingent Payment

A future payment that depends on something happening, such as hitting revenue targets. Why it matters: Contingent payments are less certain than cash at close, so owners should understand what must happen to receive them.

Related terms

Cash at Close

Money the seller receives on the closing date. Why it matters: This is usually the most certain part of the seller’s proceeds, so it should be compared separately from future or contingent payments.

Revenue

The total money the business brings in before expenses. Why it matters: Buyers look at revenue trends, customer mix, and repeatability to understand whether the business is growing, shrinking, or dependent on a few sources.

More from Deal Structure

Asset Sale Cash at Close Cash-Free Debt-Free Debt-Like Items Earnout Escrow Holdback Majority Sale Membership Interest Sale Minority Rollover Minority Sale Purchase Price Adjustment

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