An Earn-Out Is an Exit Strategy in Which an Entrepreneur

question 53

True/False

An earn-out is an exit strategy in which an entrepreneur can increase his or her payout by actively participating in the business to make sure the company hits specific performance targets.

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Definitions:

Systematic Approach

A methodical plan or process followed to achieve a specific goal or solve a particular problem.

Relevant Labor Market

The geographic and occupational area from which an employer recruits employees or expects to recruit.

High Unemployment

A situation where a larger than normal portion of the workforce is without jobs, indicating economic distress.

Voluntary Turnover

The act of employees leaving a job on their own accord rather than being fired or laid off.