Step 1
Name each payment before you add them up.
| Component | What to establish | Question to ask |
|---|---|---|
| Cash at closing | Amount, funding conditions, deductions and closing requirements | What reaches me at closing, before and after the relevant costs? |
| Seller note or deferred principal | Payment schedule, security, priority and default remedies | What happens if the payer misses an installment? |
| Earnout or retention payment | Metric, measurement dates, adjustments and dispute process | Who controls the decisions that move my payment? |
| Retained or rolled equity | Rights, restrictions, future liquidity and dilution | When, and how, might this become cash? |
| Employment or consulting pay | Duties, duration, compensation and termination | What work must I do, and what happens if the role ends? |
An agreement may use different labels. Ask your advisers to identify the economic purpose and legal treatment of each component, not just its name.
Step 2
A bigger number can mean less cash at closing.
Fictional figures. Change the assumptions in the comparison below.
Proposal A advertises a $2 million maximum; Proposal B, $1.6 million. But A pays $800,000 at closing and B pays $1 million. If neither contingent payment is earned, closing cash plus scheduled deferred principal comes to the same $1.2 million for both, assuming the deferred amounts are paid.
Change the assumed contingent payout below to see the arithmetic. The tool does not pick a winner: timing, payment security, taxes, employment duties and the actual agreement can all change the decision.
Try it yourself
Put the proposals side by side.
Compare the payment components
Illustrative starting inputs only—not market terms or offers. Enter aggregate amounts in dollars. Results are nominal, before taxes, interest, costs, discounting, and credit risk. Nothing is sent or stored.
The payout percentage is your scenario assumption, not a probability or forecast. Actual earnouts may use thresholds, caps, definitions, and timing that this simple illustration does not model. Deferred principal is assumed paid in full; it is not guaranteed. Ongoing compensation is gross pay for work and is excluded from purchase consideration.
Step 3
Read the definitions. That is where the money moves.
If a payment depends on retained revenue, look hard at how revenue is measured. How are fee reductions, market changes, withdrawals, new assets, reassigned relationships and platform changes treated? If the buyer controls those decisions, understand how the agreement deals with that.
A negotiated definition can matter as much as the number printed next to it.
Spell out how you receive reports, how discrepancies get resolved, and what happens when responsibilities change.
Take this to your own advisers
Six things to confirm before you sign.
Deal-terms review worksheet
Check what you have prepared. Add practice-level notes only; do not enter client names or confidential information. Nothing is sent or saved. Reloading clears your answers.
Questions about sale terms
Is a seller note the same as cash?
No. A note is a payment obligation with its own terms and risks. Timing, interest, security, priority, and the payer’s ability to pay matter.
Should employment compensation be included in the sale price?
Show it separately when comparing economics. Compensation is connected to work and may end if that work ends; combining it with purchase consideration can obscure the difference.
Does the comparison tool calculate net proceeds?
No. It illustrates nominal components using your inputs. It does not calculate taxes, transaction costs, interest, present value, or the enforceability and credit quality of a proposal.
About this resource
Morrowgate Private Wealth · October 23, 2026. Educational examples and preparation worksheets. They are not an appraisal, legal agreement, or prediction of an outcome.
Before you sign
Talk through the terms privately.
One conversation about what you need from a deal and which parts of an offer matter most to you. No client records, nothing to sign. One thing to know up front: Morrowgate may be on the other side of a deal like this. Bring your own advisers, and expect plain answers from us.
Walk through my offer with us →Published by Morrowgate Private Wealth. Editorial standards. Educational preparation, not an appraisal or transaction advice.