Can you earn referral fees after selling your business if you signed a non-compete?

The short answer: it depends on what your covenant restricts

Former owners can often earn referral income after a sale, because a post-closing non-compete is written around the business that was sold: its products or services, its territory and a fixed number of years from the closing date. An introduction of an unrelated company to a data licensing program may sit outside that language. It may also sit inside it. The deciding factors are the definitions in your agreement, whether the company you introduce is a customer, supplier or competitor of the business you sold, and whether you still work for the buyer.

Whether a court would enforce a given covenant is a question of state law, and states differ. Do not try to answer that part yourself. Start with what you signed, then take specific questions to counsel.

Why former owners get asked to make introductions

Owners who have sold know other owners: peer-group members, suppliers, customers' executives, the buyers who courted them. That network is growing. McKinsey estimates that about six million US small and medium-size businesses will face an ownership transition by 2035 as baby-boomer owners retire, and that more than half of US small-business owners are over 55 (McKinsey, 2026). Many of those sellers will sign restrictive covenants at closing, then field requests to introduce or advise.

A data licensing introduction is a narrow ask. You connect the owner or CFO of a US company with SourceX; you do not sell anything, advise on price or handle records. The referral program for business owners explains how owners use their peer networks this way.

What a post-sale covenant usually covers

Most purchase agreements group restrictions in one section, sometimes alongside a separate non-competition agreement signed at closing. Read each piece on its own, because each has its own scope and clock.

How it applies in common situations

Use this table as a map of what to check, not as a conclusion.

The last row is its own question, covered in can a former owner refer the company they sold. For client and staff restrictions in more depth, see does a non-solicitation agreement prevent referrals.

The read-your-covenant checklist

Work through this with the signed documents in front of you before you contact anyone.

• Find every restrictive covenant: the purchase agreement section, any standalone non-competition agreement, and any employment, consulting or transition agreement with the buyer.
• Write down each covenant's start date, length and end date.
• Copy the exact definition of the restricted business and the territory.
• List the prohibited verbs: own, manage, operate, consult, assist, receive compensation from.
• Note whether the customer non-solicit covers all customers or only those active within a recent look-back period.
• Check whether the buyer can set off claims against escrow, a holdback or earnout payments.
• Note the governing-law clause, since it points to which state's rules apply.
• Mark which companies on your target list, if any, touch the business you sold.

Disclosure and consent good practice

Tell the owner you introduce that you may receive a referral reward from SourceX. The reward is a share of SourceX's own fee, so it never reduces what their company receives, and saying so up front removes an awkward question later. If you recommend SourceX in a newsletter, a LinkedIn post or a talk, the FTC's staff guidance is that a connection such as being paid for referrals should be disclosed clearly and close to the recommendation (FTC Endorsement Guides FAQ).

Where a covenant is ambiguous, written consent from the buyer is often simpler than a dispute later. Keep the request short and specific.

Questions to ask your counsel

1. Does the restricted-business definition reach introductions, referrals or advisory work of any kind?
2. Is the company I want to introduce a customer, supplier or competitor as the agreement defines those terms?
3. Does my employment or consulting agreement require approval for paid outside activity?
4. Which state's law governs, and how does that state treat covenants signed as part of a business sale?
5. If I ask the buyer for consent, what form should it take?
6. Could a dispute over an introduction put my escrow, holdback or earnout at risk?

This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

How the reward works once you are clear

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company, and the reward becomes payable only after the buyer pays and SourceX receives its fee. An introduction or a signed agreement alone pays nothing, and no reward is guaranteed. Because payment comes late in the process, ask counsel whether your covenant turns on the date of the introduction or the date of payment. The referral earnings calculator walks through the formula, and the rewards page sets out the payout conditions.

The companies worth your call are US businesses with 50+ full-time employees at peak (contractors excluded), years of records spread across many systems, clear rights to those records and an owner or executive able to sign.

Next step

Finish the checklist, settle any doubts with counsel, then register as a partner and send your referral link to the first owner on your list. If this becomes a regular source of income, read estimated taxes on referral income before the first payment lands.