Assess whether earnout definitions will cause a post-close fight (71678c)

Situation

Customer concentration and termination-for-convenience clauses arrived with a founder who will not sign a non-compete for carve-out separation lead. That is a M&A Due Diligence Separation and Integration decision on earnout definitions will cause in a PE platform evaluating a founder-led SaaS add-on.

Decision

Carve-out separation lead in a PE platform evaluating a founder-led SaaS add-on must choose Proceed / Reprice / Walk / Hold using customer concentration and termination-for-convenience clauses after a founder who will not sign a non-compete.

Hypotheses to test

• Authorize Proceed now; customer concentration and termination-for-convenience clauses already has the discriminator after a founder who will not sign a non-compete.
• Keep Reprice in force until customer concentration and termination-for-convenience clauses is completed after a founder who will not sign a non-compete for carve-out separation lead.
• Treat customer concentration and termination-for-convenience clauses as Walk because both readings appear after a founder who will not sign a non-compete.
• Refuse a M&A Due Diligence close: carve-out separation lead does not have the page earnout definitions will cause turns on in customer concentration and termination-for-convenience clauses.

Analysis required

• Map reps, earnout mechanics, and integration risk a PE platform evaluating a founder-led SaaS add-on would inherit.
• Tie quality-of-earnings, working-capital, and contingent items in customer concentration and termination-for-convenience clauses to earnout definitions will cause.
• Name the document carve-out separation lead still needs before signing.
• For this M&A Due Diligence Separation and Integration file, read customer concentration and termination-for-convenience clauses against a founder who will not sign a non-compete and write the one fact that would move earnout definitions will cause for carve-out separation lead.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Separation and Integration packet (customer concentration and termination-for-convenience clauses after a founder who will not sign a non-compete). If customer concentration and termination-for-convenience clauses cannot force a M&A Due Diligence label under Separation and Integration, stop. If customer concentration and termination-for-convenience clauses after a founder who will not sign a non-compete cannot support Proceed versus Reprice on this M&A Due Diligence Separation and Integration close, carve-out separation lead must do not proceed, reprice, or walk on a quality-of-earnings fact the packet does not carry.