Highlights:
- Deal value is no longer just about the price. The way the price is paid is becoming equally important.
- Buyers are taking more risk carefully, especially because AI is making future growth harder to predict.
- Earnouts, rollover equity, seller notes and escrow are now common ways to share risk between buyer and seller.
- For founders, the key question is: “How much do I get today, how much depends on future performance, and for how long?”
IT services deals used to be decided by one number: the multiple. Buyer and seller argued over price, agreed on a figure, and the deal closed largely in cash.
That’s changing. Today, a growing share of the negotiation happens not in the price, but in how the deal is structured. For founders thinking about a sale, understanding these structures is now just as important as understanding valuation.
Why structure is taking over from price
Buyers and sellers in IT services often can’t agree on what the business is actually worth right now. Part of the reason is AI: it’s changing how durable a services or software business’s revenue really is, which makes buyers nervous about paying full price in cash upfront for a future that’s harder to predict than it used to be.
A shrinking platform lifecycle
- Older platforms often took the better part of a decade to move from early growth to a stable, mature market position.
- Newer platforms — built and adopted in an AI-native market — are compressing that timeline sharply, in some cases to two or three years.
- That shift matters most for the businesses built around these platforms: implementation partners, systems integrators, and specialized service providers whose entire model depends on riding a platform’s growth curve.
- A shorter growth window means less time to build scale, train talent, and become an attractive business before the market around a platform settles.
The basic building blocks
Earnout
Part of the price isn't paid at closing. It's paid later, based on how the business actually performs after the sale (usually over the next two to four years, with a mean of three years). If the business hits its targets, the seller gets paid in full; if it doesn't, they get less. This lets buyers pay a fair price without betting everything on a forecast.
Rollover equity
The seller doesn't cash out completely. Instead, they reinvest part of their proceeds into the new, combined company and keep an ownership stake going forward, staying financially invested in the business succeeding after the deal closes.
Seller note
A loan the seller effectively gives the buyer: part of the price is deferred and paid back over time, with interest, instead of all at once. It helps bridge the gap when a buyer and seller can't agree on the full cash price today.
Escrow
A portion of the sale proceeds held back for a period after closing, in case something turns out to be wrong with the business (an unexpected liability, an inaccurate claim, and so on). If nothing goes wrong, the seller eventually gets that money too.
What this means in practice
None of these tools are new. What’s new is how often they’re used together, how large a share of the deal they now represent, and how short a window they’re built around. A few years ago, these were fallback options for a difficult negotiation. Now, they’re often the default starting point.
For a founder considering a sale, this changes the question worth asking:
- Not just “what’s my price.”
- But “how much of that price is guaranteed today, how much depends on what happens after I sell, and how short is the window I have to prove it.
That’s the conversation we have with every founder we work with, before price is even on the table.
