Wall Street Journal: Rise of Earnouts Muddies M&A Waters

Back Bay CEO, Jonathan Gertler, was interviewed for an article that appeared today in the Wall Street Journal Pro Venture Capital: “Rise of ‘Earnouts’ Muddies M&A Waters: Founders, VCs fear of more disputes over milestone payments.”Writers Brian Gormley and Patience Haggin reflect that “the growing use of so-called earnouts in startup acquisitions has led to more disputes over potential milestone payments that could be paid to entrepreneurs and venture capitalists.” 

A QUOTE FROM THE ARTICLE:

Earnouts remain rooted in startup deal making and “this is especially true in biotechnology, where there is high risk a newly acquired experimental drug will never earn regulatory approval. Consequently, in biotech, earnouts are ‘the lifeblood’ of the industry,” said Dr. Gertler.

Wall Street Journal Pro Venture Capital subscribers can read the full article here.