Lower middle market transactions are often described as simpler or faster than larger deals. In practice, they're rarely simple, they're just structured differently.
In sub $50M transactions, deal certainty often depends on the mechanics: earnouts, escrows, and working capital adjustments. These tools help buyers and sellers bridge valuation gaps and manage risk, but they also require careful drafting to avoid friction after closing.
In fact, working capital adjustments and escrow arrangements are common features of lower middle market deals, and earnouts are used more frequently than in larger transactions. That makes clarity around definitions, timelines, and post closing rights especially important.
At Avid Legal, we spend a lot of time helping clients think through these mechanics early, not just to close the deal, but to avoid surprises once the transaction is complete. Clean structure upfront makes the entire deal smoother on the back end.