M&A advisory firms sell companies for their owners. The category spans sole practitioners to national banks, and the differences that matter to a seller are the buyer list, the people who do the work, and the minimum fee.
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What merger advisory work involves
Prepares the business and its earnings for institutional scrutiny, writes the information document, builds a buyer list and approaches it in a controlled order, runs offers to a deadline so they can be compared, and then holds the chosen buyer to their terms through diligence and drafting.
How they are paid
A retainer or work fee, then a declining success fee applied per tranche of price, with a minimum. Whether the retainer is credited, how consideration is defined, and how deferred payments are treated are the terms that move the total. Few firms publish anything, so three written proposals are the only real comparison.
How to choose
Closed transactions in your sector at your size in the last two years, with two sellers you call. The named team and their current mandate load. The number of buyers to be approached and how many the team has closed with. Then the fee terms, with the minimum and the tail read carefully.
Questions people ask about mergers and acquisitions advisory firms
Is an advisory firm the same as a broker?
They overlap. Brokers list and wait; advisory firms approach buyers by name and run a timetable. The fee structures differ accordingly.
Do I need one for a small business?
Usually not. Where the minimum fee is a large share of your likely price, a broker or a direct sale is a better instrument.
How many should I meet?
Three, given the same information and the same written questions, which is enough to see the spread without the process leaking.