It means in a nutshell if your clients pay their projected annual income, they will pay you based on what your ex-clients pay the new host. Can be a good deal, if your clients stick with the new host. Might check up and see if the customer satisfaction is there. if it is not there and every one cancels, then you might loose your shorts.
Seems like to me it s a sellers market right now. All thats is for sale is oversold hosts and free hosts. If you look everyone is trying to buy buy buy.All that is for sale is FREE FREEE FREE, At least thats what I get.
I'll wait until school starts and see if the market ramps up again. If it does not we are going to have a tough year..
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An earn out deal sounds suicidal to me in the hosting business ?
If the amount you make on selling the business is determined by how many clients renew, and you no longer have any control over the quality of service offered, what stops the buying company just running it into the ground and paying you a pittance ?
For a years gross I'd sign the contracts tomorrow but not if the amount I finally receive is determined by factors I can't control.