Buy-side Broker Advice

searcher profile

October 26, 2020

by a searcher from University of Texas at Austin in Austin, TX, USA

In addition to my own searches, directly contacting potential firms - I've identified a couple of firms that work with / represent buyer side deals.

I have a couple of different agreements under review and going to check with my attorney as well. However, any advice for what is customary/usual for buy-side broker fees/arrangements?

Self-funded.

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commentor profile
Reply by a searcher
from University of Texas at Austin in Austin, TX, USA
Thank you everyone for the extremely helpful insights and offers to help!
For the contract at hand, my redlines/comments are less about balking at the fees (I do not work for free, why should they?) and more around specificity (^redacted‌'s point). This is a 3-page agreement (NDA is separate) and I'm likely overthinking as a result of my corporate world conditioning. My current exposure to contracts is with large, global companies, and our contracts are extremely granular.

As I've worked through some additional reading (from ^redacted‌), comments here, and a few 1x1 chats - buyer brokers are really building a future pipeline. Today's buyer is tomorrow's seller. Secondarily, a bank of serious and well-qualified buyers is an attractive asset for someone incentivized to close deals.

Based on the advice here, the fees and structure of this agreement seem inline.
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Reply by an intermediary
from Indiana University at Bloomington in Carmel, IN, USA
I have been a buy-side advisor for 15 years and have worked with and successfully helped many of the Self Funded searchfunder type people find and buy a successful business. A couple of points, fees relate to the effort, so it depends on the size and type of business that you are hoping to buy. Most charge an upfront fee, as I do and if we don't get to the deal table, we work for literally very little $/hour. There is also a success fee as well. There are not very many pure buy side advisors out there, many sell side firms like to say that they can help a buyer, but in reality they do not specialize in the lower middle market self funded buyer market. If you would like a 3rd option, give me a call. If nothing else I can advise you on your options and if the costs are in line###-###-#### Jeff
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