Choosing an M&A advisory firm is mostly a choice about who will actually work on your sale and how many buyers they will genuinely reach. Reputation, office count and league table position tell you very little about either, and both are answerable with three direct questions.
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Who works the file
At many firms the senior person who pitches is not the person who runs the process. Ask by name who will build the buyer list, who will call the buyers, who will attend management meetings and who will be on the call at two in the morning when diligence goes wrong. Then ask how many other live mandates each of them has. A busy analyst on eight deals is a real constraint on yours.
How wide the net is
Ask for the number of buyers they will approach and the split between strategic acquirers, funds and individuals. Ask how many of those they have transacted with in the last two years. A firm whose list is a database subscription is offering something you can buy yourself; a firm whose list is people who answer their calls is offering the thing you cannot.
The engagement letter
Retainer amount and whether it is credited against the success fee. The success fee scale, including the minimum. The tail period and, crucially, whether it applies to every buyer or only to buyers the firm actually introduced. The termination right and its notice period. A tail that covers all buyers for two years can trap you into paying twice.
What good looks like in the first month
A draft information document you recognize as your business rather than a template, a buyer list you can argue with, and a firm willing to tell you your expectations are wrong. An adviser who agrees with your number in the first meeting and asks for a retainer in the second is selling optimism.
Questions people ask about M&A advisory firm
How many advisory firms should I meet?
Three. Enough to see the range in fee and approach, few enough to keep the process quiet. Give each the same information and the same written questions.
Are league tables useful?
Only for deals like yours. A firm ranked highly on large public transactions may have no relevant buyer list for a lower middle market seller, and the ranking says nothing about who will staff your file.
Can I negotiate the success fee?
The scale sometimes, the minimum rarely, the tail often. Focus on the tail and the termination right, which are where a seller's real exposure sits.