Pricing and structure frameworks

Connectivity map for three ways to frame price

• 2.2 Concept: Three ways to frame price The core concept in price and structure
• Multiple-Based Approach: Multiple-based approach One clear purchase price based on a market multiple of verified earnings. Use this when earnings are clean, stable, and well-supported by documents, and you want an offer that is easy to explain and easy to sign. (How to frame it to the seller: 'Based on the earnings we hav)
• Range-Based Approach: Range-based approach A purchase price range that narrows after diligence confirms a short list of remaining items, plus the standard working capital adjustment at close. Use this when the deal looks real but a few items could move value meaningfully. (How to frame it: 'We are proposing $8.5M to $9.5M. The final)
• Base Plus Earnout Approach: Base plus earnout approach Cash paid at closing plus additional value paid over time if performance holds. Use this when there is a real swing factor like customer concentration, heavy owner dependency, or an unproven growth story. This lets the seller reach full val (How to frame it: 'We are proposing $8.0M paid at closing, pl)

• Three ways to frame price feeds Multiple-based approach: Multiple-based approach supports three ways to frame price.
• Three ways to frame price feeds Range-based approach: Range-based approach supports three ways to frame price.
• Three ways to frame price feeds Base plus earnout approach: Base plus earnout approach supports three ways to frame price.

Decision gate for the working capital peg. Proceed when: Pricing and structure are agreed in the LOI.

• Reconsider: Seller wants a higher price. Use structure to bridge the gap rather than raising the number, or require better documenta
• Proceed: Pricing and structure are agreed in the LOI.
• Walk: Seller is more than 30% above your valuation and will not negotiate or provide data to justify their number.
• Reconsider: Seller wants a higher price. Use structure to bridge the gap rather than raising the number, or require better documenta