Earn-out is when the seller agrees to accept a percentage of the sales price and stays on to manage the business for a few more years under the new owner.

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This is correct. An earn-out is a common arrangement in which a portion of the sale price is contingent on the business meeting certain financial targets over a period of time. The seller often stays on as a consultant or manager during this period to help ensure that these targets are met.

Earn-Out Is When the Seller Agrees to Accept a Percentage