Seller financing, earnouts, and revenue shares for SaaS sales
The price is only part of a SaaS acquisition. How and when you get paid, and whether you stay involved, can matter just as much. The North Yard works with founders on the structure that fits their situation, whether that's a clean exit or staying on for a while.
Here's how the common structures work, and the trade-offs of each.
Payment at closing
The simplest structure: you're paid at closing and hand over the business. It's clean and certain, and it's what many founders want. The trade-off is that the buyer carries all the risk of the business performing after the sale, which is reflected in the price.
Seller financing
With seller financing, part of the price is paid at closing and the rest is paid to you over an agreed schedule after the sale. You're effectively letting the buyer pay part of the price in installments.
It can let you agree a higher total price, and it shows the buyer you believe the business will keep performing. The trade-off is that some of your money arrives later rather than on day one.
Earnouts
An earnout ties part of the price to how the business performs after the sale, for example if revenue stays above an agreed level for a set period. If the business does well, you receive the extra amount.
Earnouts can bridge a gap when you and the buyer see the future differently. They work best with simple, measurable targets that both sides can verify from the same data.
Clean exit or staying involved
Some founders want a clean break. Others want to stay on for a transition, or longer, to help with the product or customers. Neither is better. We build the handoff around what you're looking for.
How to choose a structure
- If certainty matters most, favor more of the price at closing.
- If you want the highest total price and trust the business, seller financing or an earnout can get you there.
- If you want ongoing upside without running the product, look at a revenue share.
- Whatever you choose, make sure every target is measurable from data both sides can see.
We'll walk through the options with you and put the structure in plain language before anything is signed.
Frequently asked questions
What is seller financing when selling a SaaS business?
Seller financing means part of the purchase price is paid at closing and the rest is paid to the seller over an agreed schedule after the sale. It can support a higher total price and signals the seller's confidence in the business.
What's the difference between an earnout and a revenue share?
An earnout pays extra if the business hits agreed targets after the sale. A revenue share pays the seller a percentage of revenue for a set period. Revenue shares are usually simpler to measure because both sides can see revenue in the payment processor.
Can I stay involved after selling my SaaS?
Yes, if you want to. Some founders prefer a clean exit, others stay on for a transition or longer. The North Yard builds the handoff around what the founder wants.