Outright purchase means buying something completely, in one transaction, with no deferred payments or contingencies. In startup and investment contexts, it typically refers to an acquirer buying a startup for cash paid entirely at closing.
Outright purchase meaning
When an acquirer makes an outright purchase of a startup, they pay the full acquisition price at closing and receive 100% of the company's equity. This contrasts with:
- Earn-out structures — part of the purchase price is paid contingent on future performance
- Stock-for-stock acquisitions — the acquirer pays with their own equity instead of cash
- Asset purchases — only specific assets are acquired, not the whole company
Outright purchase vs installment purchase
| Structure | Payment | Risk |
|---|---|---|
| Outright purchase | 100% at close | Low for seller, high cash need for buyer |
| Installment purchase | Split over time | Seller bears execution risk |
| Earn-out | Contingent on milestones | Seller bears market/execution risk |
Founders generally prefer outright purchases because the money is in hand immediately and there is no dispute risk over earn-out metrics.
Outright expense meaning
In accounting, an outright expense (or outright cost) is an expense recognized immediately in the period it is incurred, rather than capitalized and amortized over time. Software development costs, for example, may be either capitalized or expensed outright depending on the accounting treatment.
When outright purchase is used
- Strategic acquisitions where the buyer wants certainty and clean execution
- Acqui-hires where the goal is the team, not future revenue
- Distressed sales where speed is more important than price optimization