The headline price is not the cash at closing
Reported deal values are often the most the seller could receive under the purchase agreement, not what is paid on day one. [4] True all-cash deals, with 100% paid at closing, are rare, and FP Transitions says they usually come at a sizable discount on the price. [5] Most deals mix cash with payments that come later and depend on what happens after the sale.
Down payment
In the deals SRG tracked, the average cash down payment rose from 63% in 2023 to 65% in 2024 and 68% in 2025. [1] Buyers using third-party financing put down an average of 78% in 2025. [1] In 2024, the average down payment was 73.8% when a lender was involved and 48.5% without one. [2]
FP Transitions describes its most common structure differently: about one-third of the price as a cash down payment, and a seller-financed note for the balance paid over about five years at 5% interest. [5] Different firms see different pools of deals, so treat any average as a reference point, not a rule.
Seller notes
A seller note is the part of the price the seller finances, paid over time with interest. SRG reports that seller financing was used in 56.8% of 2024 deals, with an average term of 5.94 years at 4.9% interest. [2]
The IRS treats a sale with at least one payment after the tax year of the sale as an installment sale, and interest on it is generally reported as ordinary income. [6]
Earnouts and retention clauses
An earnout makes part of the price depend on what happens after the sale, typically client retention over one to three years. [7] In 2024, 52.60% of the deals SRG tracked included a retention clause, with an average target of 88.00% of annual gross revenue. [2] In 2025, 48.9% had some form of clawback. [1]
Mercer Capital says retention earnouts typically run 12 to 24 months. [8] Kitces.com reports that in the current market earnout periods of three to four years after closing are not uncommon, that growth targets of 10% to 15% a year are standard in many deals, and that in many deals as little as 50% or even 25% of the price is paid in cash at closing. [9]
Buyer equity
When the buyer is a larger firm, part of the price may be paid in the buyer's own stock. Kitces.com reports that deals where the acquirer's equity is 25% to 40% of the price are now routine, and that such equity can come with transfer restrictions that limit liquidity until an exit event. [3]
Comparing offers
As SRG puts it, a dollar of cash and a dollar of earnout are not worth the same. [10] When comparing offers, line them up by cash at closing, the amount that depends on retention or growth, when each payment is due, what triggers a reduction, and what any buyer equity can be sold for and when.
See recent deals in the deal tracker, or the timeline guide.