Most mergers and acquisitions do not settle in a single wire. Earn-outs, holdbacks, working-capital adjustments, and regulatory conditions spread value across months or years. Without a neutral structure, each tranche becomes a separate negotiation — and a separate point of failure.
Milestone-based escrow maps deal economics to verifiable events. Funds are allocated up front, then released when defined conditions are met and the right parties approve.
Common milestone structures
- Closing deposit — released when signing and initial filings complete
- Working-capital true-up — held until post-close accounts are reconciled
- Earn-out tranches — tied to revenue, EBITDA, or retention targets
- Indemnity holdback — reserved for reps-and-warranties claims
Who approves each release
Enterprise deals rarely allow a single click to move seven figures. Maker-checker policies assign approvers by role: buyer counsel, seller counsel, broker, and sometimes a platform operator for threshold amounts.
Each milestone records who submitted evidence, who approved, and when funds moved — creating a defensible audit trail if a dispute arises years later.
The goal is not to slow closing. It is to make every subsequent release predictable instead of adversarial.
Designing milestones that hold up
Vague language causes disputes. Effective milestones specify measurable triggers, evidence requirements, deadlines, and what happens on partial performance. If an earn-out target is missed by a narrow margin, the agreement should already define the outcome.
EscrowBolt supports multi-party deals with broker and facilitator roles, so complex acquisitions do not collapse into email threads and informal payment requests.
When to use holdbacks
Holdbacks protect buyers against undisclosed liabilities. Sellers accept them when the amount and release schedule are clear. A typical structure releases 80% at close and holds 20% for twelve months, with documented claims processes.
Neutral custody removes the awkward dynamic of the buyer holding seller money in an operating account — an arrangement that often creates discomfort on both sides.