A guide to the escrow and asset-transfer process on Acquire.com that protects you from fraud
Last updated: June 26th, 2024
Escrow is the safest way to close your acquisition. It protects you and the seller from fraud and ensures you both walk away from the deal with what you wanted.
We’ve partnered with Escrow.com and SRS Acquiom to secure your acquisition. It’s safe, trusted, and free, and supports most deal structures, including those with conditional payments.
And if you used our LOI and APA builders, your deal information will be pulled through into our escrow builder, making it fast and easy to close. You can also manually fill out our escrow builder if you uploaded your own APA.
However, you don’t have to use Escrow.com or SRS Acquiom. If you’ve chosen your own escrow service, just let us know a contact with whom we can share your APA to speed up closing.
Here’s how escrow works on Acquire.com.
We recommend using an escrow service on all deals regardless of size. Escrow.com is free to use so you lose nothing by protecting your deal.
For larger deals we have introduced our new partner SRS Acquiom who provides white-glove escrow service with a dedicated rep for startups with asking prices above $250k
1. Build escrow transaction
Click Start escrow from your deal page and then follow the on-screen instructions to check the deal and update the asset inspection periods (if necessary – the default is 24 hours).
You’ll finish on a summary of your escrow details, including closing and conditional payments. When you’re happy, send escrow details to the seller.
The seller will either agree to your escrow details and you’ll move to finalizing escrow terms on Escrow.com or SRS Acquiom, or they’ll reject them, and you’ll need to restart the process.
Ensure your name on the escrow transaction is the same as that on your signed APA so Escrow.com or SRS Acquiom can verify the transaction. If you signed your APA in your name but your escrow transaction is in a business name, your transaction may fail.
2. Send acquisition funds to escrow
Once escrow starts, you first need to send your funds to Escrow.com or SRS Acquiom for verification.
Include your closing payment plus any conditional payments (milestone payments) but not seller financing repayments. You’ll need to handle seller financing repayments as described in the seller’s financing agreement in your APA.
Escrow.com or SRS Acquiom will verify your funds and then ask the seller to transfer the assets to you. When you receive these assets, we’ll ask you to confirm receipt to start your inspection period.
3. Review acquisition assets
You have a set period of time to review the seller’s assets and then approve or reject them called the inspection period.
The default inspection period is 24 hours unless you changed this when building your escrow transaction on Acquire.com.
Your inspection period starts when you confirm receipt of the acquisition assets and ends when you approve or reject the assets, or when the time runs out.
4. Release funds
Approve the assets on Acquire.com when you’re happy with them. If there’s a problem, reject the assets, and if necessary, contact Escrow.com or SRS Acquiom for help resolving the issue.
Assuming the transfer goes well, all that remains is for you to approve the assets and then Escrow.com will release funds to the seller.
The seller will also let you know when they meet any post-closing conditions, and if you’ve used Escrow.com or SRS Acquiom to close, we’ll let you know when they request payment. You then have another inspection period to review the condition, verify the seller has met it, and release payment.
Once your closing and conditional payments have been made, your acquisition is complete.
Escrow and close with Acquire.com founder, Andrew Gazdecki
Further reading
- Close Safely and Easily With the Escrow Builder
- How Does Escrow Work on Acquire.com?
- 10 Post-Acquisition Strategies to Increase Revenue 10 Percent or More
Glossary
Escrow
Escrow is a third-party service that safely manages the transfer of funds, removing the need for trust between two parties doing business together. As a regulated, neutral party in the transaction, an escrow service provider prevents fraud and other financial crime.
Intellectual property
IP is an intangible asset and might include your startup’s code, proprietary technology, trademarks, copyrighted assets, patents, and so on. You should have legal agreements that protect your IP from anyone else using, reproducing, or distributing it without your consent.
Still need help?
Search the help center again or contact us at support@acquire.com.