Buy side and sell side describe which party an adviser works for. The sell side represents the owner selling a company; the buy side represents the acquirer. The same firms often do both, the incentives point in opposite directions, and a seller who does not know which they are hiring can end up paying for the wrong service.
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Buy side, sell side: what each side is trying to do
The sell side creates competition: it prepares the business, approaches many buyers, runs them to a deadline and negotiates the price up. The buy side does the opposite: it finds targets, diligences them hard and negotiates the price down. Those are not two flavours of the same job, they are opposed objectives, and the skills that make somebody good at one are not the skills for the other.
Who pays, and how
Each side pays its own adviser. The sell side is typically paid a retainer plus a declining success fee on the price achieved. Buy side mandates are more often paid a retainer plus a fee on completion, sometimes with a component tied to how far below the asking price the deal closes. That is worth knowing when a buyer's adviser tells you the price is too high.
Why it matters to a seller
Many firms run both desks, which can be an advantage because the buyer list is real. It becomes a conflict when one of their buy side clients bids for your business. Ask any firm whether they act for buyers, and what happens in that situation, and get the answer in the engagement letter rather than in conversation.
Questions people ask about buy side vs sell side
Can one adviser act for both parties?
It happens in smaller transactions and it should be disclosed in writing. An intermediary paid by both sides cannot be negotiating hard for either, and a seller should know before the first meeting.
Is sell side more expensive?
Not inherently. Sell side mandates carry more preparation work and therefore often a retainer, while the success fee structures are broadly similar.
Do buy side and sell side mean something different in banking?
Yes. In capital markets the terms describe institutional investors and the banks that serve them. In private company M&A they simply mean which party the adviser represents.