An advisor who sold the business usually knows its records better than anyone at the acquirer. That knowledge is exactly why the advisor should move slowly. The earn-out turns what would be a routine introduction into a question about who gains if a license closes, and whether it moves a number two parties are watching.
Why the earn-out years are the delicate stretch
Earn-outs tie part of the price to how the business performs after closing, so both sides watch every new revenue line and every cost. They are also often disappointing for sellers. SRS Acquiom's 2026 earnouts and claims study, which covers 405 earnout metrics or milestones with about $6 billion at stake, reports that earnouts outside life sciences paid out at roughly 21 cents on the dollar (a paraphrase of the study summary, checked 2026-10-27). A seller in that position will read any new income as a chance to close the gap, and a buyer may read it the other way.
A data license is a new line of that kind. SourceX's process page says it usually pays a one-time fee for a dataset, with some agreements setting recurring deliveries, and that data which does not reach Closing earns nothing. Whether such a fee lands inside the earn-out metric is written in the earn-out definition, nowhere else. The deal-document questions, stage by stage, are listed in the earn-out issue list for brokers, and the one-time revenue question shows why definitions matter. This page deals with the people: who wants to introduce, who gains, and who has to hear the question first.
Who holds the decision while the earn-out runs
The decision moves once, at closing, and stays put through the earn-out.
| Stage | Who decides on licensing | Who often wants to introduce | What makes it sensitive |
|---|---|---|---|
| Letter of intent to closing | The target's CEO, within whatever the purchase agreement allows | The seller, to support the price | The purchase agreement may limit new commitments before closing; only counsel can say how |
| Closing | Authority passes to the acquirer's CEO | The sell-side advisor, while relationships are fresh | The advisor still holds deal-room knowledge |
| Earn-out period | The acquirer's CEO | The selling founder, now an employee or unit head | The founder may gain twice: from a reward and from the metric |
| After the final measurement | The acquirer's CEO | Anyone with a live relationship | Few earn-out conflicts remain; credit and duplicates still apply |
SourceX's screening page states the rule this table follows: once a company is acquired, the acquirer's CEO decides for it, not the former board. The acquired company also now belongs to the acquirer's group, and a parent with its subsidiaries counts as one company, so the USD 50,000 floor on a first qualifying transaction applies once across the group.
Credit has its own traps. Section 3 of the terms treats a company that already had an application, relationship, lead, account or email correspondence with SourceX as a duplicate, so a later introduction is not credited. Whether contact the acquirer or a sister company already had changes credit for the acquired business is not written in the terms; SourceX resolves it when it reviews duplicates, from dated records, and an advisor should not predict the answer.
The counsel escalation sheet
Illustrative. Six generic situations an M&A advisor or business broker may meet after a sale with an earn-out. Each row names who reads the relevant document; none states what the document will say.
| Situation | Why it is sensitive | Escalate to | What the advisor does meanwhile | Stop sign |
|---|---|---|---|---|
| The selling founder, now employed by the acquirer, wants to register as the partner and collect the reward | A personal reward, an earn-out stake and duties as an employee all point at one decision | The founder's own counsel, reading his employment and earn-out agreements; then the acquirer's CEO, told in writing | Submits nothing for the founder and does not coach him on wording | The acquirer's CEO has not been told |
| Your own success fee includes a share of earn-out payments | You gain from the metric and from a reward | Your own counsel, on your engagement letter; then a written disclosure to the acquirer's CEO and your former client | Holds the introduction until the disclosure is out | Your former client objects |
| Licensing income might count toward the earn-out metric | Buyer and seller want opposite answers | The seller's counsel and the acquirer's CEO with counsel, both reading the earn-out definition, with their accountants | Predicts nothing and quotes no figure | Either side asks you to wait |
| An earn-out dispute is open or threatened | Any outreach can look like leverage | Nobody new; the parties' counsel own the dispute | Pauses all outreach about the company | Any active dispute |
| The records were created before closing, in an asset purchase | The records may have moved to the buyer, or stayed with the seller as retained material | The seller's counsel or the acquirer's CEO with group counsel, whichever side holds the records, reading the purchase agreement and its schedules | Asks only which entity holds which record family | Nobody can say who holds them |
| The seller wants a license signed before closing to support the price | A referral would become a deal sweetener | The seller's counsel, on what the purchase agreement allows before closing | Pauses until counsel answers; puts no reward or estimate in deal materials | Counsel advises waiting for closing |
Three habits keep the sheet useful. Escalate the question, not your opinion of the answer. Put each answer in writing with a date. And if two rows apply at once, the stricter stop sign wins.
The asset-purchase row often needs its own work. Asset and stock sales leave records in different places, and a seller that kept a copy of the sold business's archive faces separate questions, mapped in the retained archive after a divestiture.
What came from the deal room stays there
A sale process hands the advisor a great deal: system lists in the data room, headcount schedules, customer concentration, the disclosure schedules. None of it belongs in a referral. An introduction carries only what the acquirer's CEO has approved for SourceX to hear.
| Known from the sale process | Allowed in the referral note |
|---|---|
| Data-room system inventory and record volumes | The record families the acquirer's CEO is willing to discuss, at metadata level |
| Customer contracts and their confidentiality terms | Nothing; rights are for SourceX's review and the company's counsel |
| The earn-out definition and its targets | Nothing |
| Headcount schedules | Whether the company reached 50 or more full-time employees at peak, as the CEO confirms it |
| Your view of what the records are worth | Nothing; no estimate of any kind |
The partner agreement backs this up from SourceX's side. Section 4.2 of the unsigned sample gives a partner no authority to share a supplier's inventory, records, raw data or personal information. Section 4.6 bars a partner from telling a referred company that an estimate, positive interest, a signature or a data upload assures a purchase or a reward, which rules out "this could help your earn-out" as a pitch. And section 2.4 notes that the agreement binds only its parties, so the acquirer is held to nothing by your contract with SourceX. If the records include sensitive material, the sensitive data question is the right starting point for the company.
A quiet introduction, with its limits written down
Once the sheet's open rows have answers, the introduction itself should be the least eventful part.
- One message, to the decision-maker. Reach the acquirer's CEO through whoever the CEO already listens to, which after a sale is rarely the sell-side advisor. The closing-stage contact map helps choose that person.
- Disclose your interest in the first message. Say that you are a registered partner, that SourceX pays partners a reward if a license closes, and, where it applies, that your own fee involves the earn-out.
- Write a limits note and keep it. Date; the CEO who agreed; each interest disclosed; which counsel answered which row; what you did not share from the deal room.
- Mind the attribution clock. The first valid introduction within the 90-day window is credited when the company submits a verified application. Introduce when the acquirer can act, not while counsel is still reading.
One sale, three escalations (Illustrative)
Illustrative. A generic company and invented facts; no outcome is implied.
A broker sold a 140-person commercial HVAC service company to a regional consolidator. The price included a three-year earn-out on the unit's operating profit, and the broker's success fee includes a percentage of each earn-out payment. Eight months later the founder, now the unit's general manager, calls: the unit holds eleven years of service tickets and technician notes, and he has read that companies license such records. Could he refer it himself and keep the reward?
The broker opens the sheet. Row 1 applies to the founder, row 2 to the broker and row 3 to both. The founder takes the question to his own counsel and decides not to act as the partner; he tells the consolidator's CEO about the idea instead. The broker sends the CEO and the founder a short written disclosure of his earn-out-linked fee. The consolidator's CEO asks the group's counsel and accountants whether a license fee would sit inside the unit's earn-out metric, and wants an answer before any application.
Only then does the broker submit the introduction, with the CEO's approval. If a license later closed with an Actual Supplier Payout of $250,000, the one credited partner's reward would be $62,500 (USD 50,000 plus 5% of the payout, which is more than 15% of it), paid by SourceX separately; nothing for the partner comes off the compensation in the company's signed agreement. Whether the $250,000 counts toward the earn-out is a matter for the earn-out definition, which the CEO's counsel has already read. Every figure here is invented to show the order of events.
The company still has to fit: 50 or more full-time employees at peak (contractors excluded), documented operating history, rights to license its records and a CEO who wants the conversation. 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.
What the escalation sheet cannot answer
- The law and the documents. The sheet names readers, not results. Earn-out definitions, employment agreements and engagement letters differ deal by deal.
- Your professional rules. SourceX's referral page tells licensed professionals to check their own rules on referral fees; whether and how you disclose a reward may be governed by them.
- The acquirer's internal policies. A consolidator may have its own rules for employees who introduce vendors or partners. The sheet assumes you will find out, not what they say.
- Credit across the group. The acquirer's group counts as one company for the once-per-company floor, and how earlier contact with related companies affects credit is decided in SourceX's duplicate review.
- Outcomes. Whether any license follows is decided in SourceX's review and the company's own signed agreement, and a reward is payable only once the program's conditions are met.
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 every live row on the escalation sheet has a dated answer and the acquirer's CEO wants the conversation, register as a partner, measure the company against the published screen and keep the referral terms beside your limits note. More transaction playbooks sit in guides and on the business broker page.