The Lone Star Perspective

by Matt Magee at mForce Capital​

Don’t Spend the Earnout

Picture an HVAC owner outside Fort Worth. Call him Roy.

Twenty-seven years building the company. Started with one truck. Answered calls during dinner. Made payroll through summers when the equipment broke and winters when the phone barely rang.

Now somebody wanted to buy it.

Twenty million dollars.

Roy drove home thinking about paying off the house. Taking his wife somewhere nice. Finally leaving his phone on the kitchen counter.

Then his attorney walked him through the offer.

“Fifteen million at closing. The other five depends on what happens afterward.”

Roy looked at the papers again.

Same offer. Different feeling.

That’s the lesson hiding inside PepsiCo’s acquisition of Poppi.

PepsiCo bought the soda company for $1.95 billion in 2025, with an additional performance-based earnout. By December 2025, it valued that potential payment at $278 million. As of September 5, 2026, that estimate had fallen to $12 million.

Here’s the detail that matters: $12 million wasn’t a revised check to the sellers. It was an accounting estimate. The agreement calls for a $300 million payment if certain milestones are reached by the third quarter of 2027 and no payment otherwise.

A service business owner doesn’t need to sell soda to understand that risk.

You may know how to grow your company. But after a sale, who controls hiring? Pricing? Marketing? Who decides which expenses count against the profit target that determines your payout?

Those questions deserve answers before you sign.

An earnout can help get a deal done. It can also leave part of your payday tied to decisions you no longer control.

Before closing, have your deal team explain exactly how you earn that money, how the results are measured, and what protection you have if the buyer changes course. Then build your personal financial plan around the proceeds you can count on after taxes, debt, and fees.

Roy still wanted to sell.

He just needed to know whether fifteen million would give him the life he wanted if the other five never arrived.

You spent decades making payroll with real money.

Use the same discipline when you plan your exit.

Audience Spotlight

Are you tasked with business development for your firm? Are you a business owner who is still doing some BD work when you have time? If you want a better framework for how to structure your efforts, give Ashley Bartlett a shout.

Do you find yourself in need of a fractional COO as the owner of a manufacturing or skilled trades business? I've got a guy for you; take a look at ATLATL and Jason. Let me know if you need his email.

Shameless plug for my wife and the firm she is a part of. If you find yourself in need of brand/ marketing guidance from professionals, I've got the group for you. Spring Digital Consulting.

If you have struggled to turn strategy into measurable results and are not sure what to do, take a look at what Marc is doing.

Who I Serve

You’ve worked hard to build your success. But a surprise tax bill or a growing pile of cash you’re unsure what to do with can leave you wondering if you’re missing something. I help growth-minded entrepreneurs and professionals get clear on their next steps and put their money to work toward lasting wealth.

If that sounds familiar, reply here, and we can schedule a time to talk.

What I've Enjoyed Recently

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​BG2 with Jensen Huang. A two-hour deep dive on AI and where things are headed.

​Tyson on Netflix is fantastic so far. Also on Netflix is Gentlemen. I know, I know, I am a few years behind; I accept that.

​Making the Zeros Count: I just learned of this book from a podcast. This is all about finding purpose after financial success. See what you think and let me know.

​What's Still Valuable When Intelligence is Free? Great podcast exploring the AI buildout and this question.

Until Next Time

-Matt Magee

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Copyright (C) 2025 mFORCE Capital All rights reserved.

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Registered Representative of Sanctuary Securities Inc. and Investment Advisor Representative of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc,

Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., a SEC Registered Investment Advisor. mFORCE Capital is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.

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