The Mortgage Reports publishes information about mortgages for home owners. Site founder Dan Green, capitalized on the internet traffic they generated by selling leads to mortgage lenders.
Within three years, Green crested a million dollars a year in annual revenue. That’s when he began to worry about new regulations and compliance as his business went from being a hobby to a major player in the mortgage leads industry. Green decided to sell and quickly got three offers from the companies he was selling leads to.
The first offer was mostly cash. The second was for half cash and the other half “at risk” in an earn-out tied to meeting lead volume goals in the future. The third offer included a small payment up front with a rich potential earn-out if Green was able to send the acquirer enough quality leads. You may be surprised to learn which of the three offers Green picked.
In this episode, you’ll learn:
The difference between being a core product and an add-on feature The importance of breaking bread with your potential acquirer What terms and conditions to include in an earn-out contract How to vet a potential buyer when an earn-out is involved