I had reached out to an advisory a while ago to introduce myself, and tell them about my search criteria, and they pitched a deal to me. That one didn't work out but now they're dangling a deal that fits my requirements, but they seem to want a buy-side agreement first since they don't have the selling party committed to them yet.
The terms are fairly open in that I can cancel the agreement at any time, etc., but it does come with a 5% commission on any deal they bring to me. Is this standard, or good terms?
I've never used a buy-side advisor before, and they don't want a retainer or anything else, but 5% seems high.
Thoughts, advise?
Buy Side Advisor experience?
by a searcher
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
From my personal experience, it is within the range.
For my agreements, I usually negotiate a flat rate but I also allow for concessions deal by deal specific especially if the financials of the deal will be too tight.
for example, we can agree on 5%, but the deal you are working on will only support 3%, then guess what? The commission for that deal is 3%. This is me but I know there are folks that are very rigid and won’t budge. As long as you don’t have an exclusive with this individual, you always want to keep your options open. For a previous deal we were working on, we have 5 separate agreements in place because the first to the table wins. What do we care how many agreements we have in place as long as the deal gets done then everyone wins
Carefully review the fine print of any engagement agreement.
PM me if you want to Zoom about this.