A contractual agreement between the buyer and seller of a business whereby a portion of the purchase price is to be paid at a time later than the closing, contingent on the seller (usually the principal or owner) staying with the business in some capacity. The capacity can vary and range from a simple consulting capacity to serving as full-time CEO. The payment of an earn-out is usually contingent on the seller completing some task, meeting a goal (like a sales goal) or meeting some other deliverable, during the earn-out period.

As a seller, there are specific strategies to eliminate the need for an earn-out or at least minimize the risk and effort involved in an earn-out.