Which earnout and transaction questions should a business broker raise before a data-license discussion?
The ones that decide whether a license is permitted, who must consent, and whose number it moves. Ask them by deal stage, because the controlling document changes as the deal advances.
The live guide on introducing companies without disrupting a sale explains why a data license is separate from an acquisition. This page is narrower: it lists the specific transaction questions that come before any licensing conversation, and the paper that answers each one.
Why earnouts make this sharper
Earnouts tie part of the price to post-closing performance, so anything that changes revenue, cost or the use of business assets after closing can matter to both sides. They are not rare. The American Bar Association's 2025 Private Target Deal Points Study, covering 139 acquisitions of private targets by public buyers signed or closed in 2024 or the first quarter of 2025, found earnouts in 18% of deals, down from 26% in its 2023 study.
Delaware case law, summarized by the ABA in 2022, adds a practical point. Courts have held that the implied covenant of good faith does not oblige a buyer to maximize an earnout, but where a contract gives one party discretion, that discretion must be used reasonably and in good faith, and an express efforts clause governs over implied terms. Whether a data license helps or hurts a seller's earnout, and who gets to decide, is therefore written in the agreement, not assumed. Both sources checked 2026-10-18.
The issue list (for the deal team)
Each row names the document that answers the question and the person who reads it. The broker raises; counsel and the principals decide.
| Stage | Question to raise | Document to read | Who answers |
|---|---|---|---|
| Letter of intent | Does exclusivity or no-shop wording cover licensing of assets, or only a sale of the company? | Signed LOI, exclusivity section | Seller's counsel |
| Letter of intent | Does the confidentiality clause allow the company to discuss its data with a third party? | LOI or NDA with the buyer | Seller's counsel |
| Signing to closing | Do interim operating covenants require buyer consent for new material contracts or IP licenses? | Purchase agreement, conduct-of-business covenants | Seller's and buyer's counsel |
| Signing to closing | Would a new license change the disclosure schedules for IP, data or material contracts? | Disclosure schedules | Seller's counsel and CFO |
| Closing | After closing, which entity holds the rights to the records: the same company in a stock deal, or only listed assets in an asset deal? | Purchase agreement, asset schedule | Counsel for the rights holder |
| Earnout period | Does licensing income count toward the earnout metric, and are non-recurring items excluded? | Earnout definition and accounting principles schedule | Seller, buyer and their accountants |
| Earnout period | Who controls decisions on new revenue lines, and is there an efforts clause? | Earnout covenants | Buyer and seller principals with counsel |
The same list applied (Illustrative)
A fictional 120-person specialty insurance agency is under LOI with a strategic buyer. The broker learns that the agency holds twelve years of claims-handling notes and SOPs, and the owner asks whether a data license could add value before closing.
The broker does not answer. She sends the owner and seller's counsel the first four rows above and asks for one meeting. Counsel finds that the LOI's exclusivity clause covers "any sale, license or other disposition of material assets" and advises waiting. The broker records that answer and the expected closing month. After closing, the buyer's CEO becomes the person who can authorize a licensing discussion, with the corporate development lead as the working contact, and the earnout definition shows licensing income is excluded from the seller's metric, which removes the incentive conflict. The introduction is made then, to the buyer's CEO, with the seller informed. The clause wording and every outcome here are invented to show the sequence.
Company qualification and what stays unknown
The company still has to meet the program baseline: at least 50 full-time employees at peak (contractors excluded), documented operating history, rights to license and an authorized contact. Companies in the U.S., Canada and the EU qualify, as do companies in the UK, Australia, New Zealand, India, Singapore, South Africa, Latin America, the UAE and Saudi Arabia when at least 70% of the data is in English. In a sale, "authorized contact" may change at closing; the acquired company question covers who signs afterward.
Unknown until SourceX reviews: whether there is demand for the records, what the rights review finds, and any compensation, which is agreed between SourceX and the company. More on screening is at who qualifies.
Limits and unanswered questions
- No legal conclusions here. Every row ends with a document and a person, because the answer depends on wording only counsel can interpret.
- Two kinds of compensation. A broker's success fee comes from the engagement letter. A SourceX referral reward is a separate amount paid by SourceX, never deducted from the company's payout, and payable only when the program's conditions are met.
- Attribution has a clock. The first valid introduction within the 90-day window is credited when the company submits a verified application. If counsel advises waiting for closing, make the introduction when the company can actually proceed, so the window is not running while the deal team is still answering the issue list.
If the company already has a broker, see referral fees when a company already has a broker. Brokers starting out can use the first-month referral plan for business brokers and the business broker partner page.
Next step
Refer a company. No cap on rewards. Default reward on a company's first qualifying transaction: the greater of $50,000 plus 5% and 15% of Actual Supplier Payout, with no cap; further qualifying transactions first agreed within 12 months of the first Closing pay 15%. Eligibility and payment conditions apply, including the USD 100,000 Minimum Transaction, and a signed Schedule A or addendum can differ. A lead, meeting or signature alone does not trigger payment.
When the deal team has answered the issue list and named who can authorize a licensing discussion, introduce that person: register, check who qualifies, and read the terms. More playbooks are in guides.