If a meaningful portion of your purchase price is allocated to an earnout, one major question is how to ensure that your employees are incentivized to help you achieve it, particularly in deals where the Seller is not operating the post-closing business.

A recent conviction of a malicious employee shows, yet again, how SMBs can be targeted and victimized by their own employees.

You should definitely enlist your corporate counsel to help you prepare the LOI (buy-side), or at least review it (sell-side). We don't do what you do (build and scale businesses), and you don't do what we do (cover you on the legal front).

We spotted a pair of recent SMB/lower-middle market deals in the news. Both had useful nuggets buried in their earnout clauses.

Reuters reports that OpenAI, Microsoft, The New York Times and a group of authors are asking a federal court to address whether copyrighted books and news articles can be used to train AI models under the doctrine of fair use.

But that's only one side of a much larger intellectual-property question.

…contracting policies serve an important purpose. They create consistency, establish negotiating parameters and streamline approvals. But a contracting policy shouldn't become a substitute for negotiation. “It's our policy” shouldn't mean “take it or leave it”, particularly when a reasonable alternative addresses the underlying concern.