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Erudite AfricaCenter of Excellence
← Negotiation and Deal Structuring

Structuring tools that bridge valuation gaps

Module 02 / 5 · 65 min

Use consideration forms, earn-outs, preference and convertible instruments, ratchets, staged investment, FX-linked pricing, escrow and vendor finance to close a valuation gap and share risk.

In this module you will learn to

  • Build a post-money capitalization table that mixes primary and secondary shares
  • Design and compute an earn-out and a valuation ratchet, and anticipate disputes they cause
  • Explain how preference shares, convertibles and warrants change who gets what at exit
  • Price deferred consideration with FX linkage and use escrow and vendor finance to share risk
  • Choose the right combination of tools for a given gap

Built on

  • Erudite Africa course specification: 3.h Negotiation and Deal Structuring, Levels 1 and 2 (October 2026), extended to Advanced depth
  • Erudite Africa: Training Module, Ethiopian Context, programme overview and regulatory register (October 2026)
  • Investment Proclamation No. 1180/2020, Investment Regulation No. 474/2020 and Investment Board Directive No. 1082/2025
  • NBE directives as listed in the lessons: FXD/01/2024, FXD/04/2026, SBB/87/2024, SBB/92/2024
  • Income Tax Proclamation No. 979/2016 as amended by No. 1395/2025, and Transfer Pricing Directive No. 981/2024
  • Commercial Code Proclamation No. 1243/2021, Arbitration and Conciliation Working Procedure Proclamation No. 1237/2021, Capital Market Proclamation No. 1248/2021 and the ESX Rulebook (December 2024), as cited in the specification

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.