A milestone is a predefined event or objective whose achievement triggers a payment, financing tranche, option or contractual right. In fundraising, milestones define the conditions for releasing successive tranches of committed capital. In M&A, they structure conditional price supplements linked to binary events — patent grant, commercial contract signature, regulatory approval. Unlike earn-outs based on progressive financial metrics, milestones trigger all-or-nothing payments.

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Example: in the acquisition of a Swiss biotech company for CHF 8.0 million, a milestone of CHF 3.0 million is payable if the medical device obtains CE marking within 18 months post-closing. This binary milestone is valued upfront at CHF 1.8 million (60% probability of achievement, discounted 18 months at 15% cost of capital) and integrated into the total transaction value for IFRS 3 purchase price allocation purposes.

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Hectelion values milestones in conditional price structures using probability-weighted and discounted cash flow models appropriate to the specific timelines and risk profile of each event.