I was chatting last week with a new acquisition entrepreneur and trying to help with his search. He asked a really great question and one that I don't know the answer to. Any insight would be great.
Given 80-90% of lower middle market deals come through business brokers and intermediaries, do buyers typically compensate those folks when they share deals. If so, what does that comp structure look like ( Is there a specific percentage or fee that's commonly paid)? Is it formal (biz dev agreement) or informal (handshake).
For clarification - this individual had been contacting multiple brokers, did not want to sign exclusively to do a search with a single broker, but had wondered if they should offer comp to brokers that bring deals they acquire.
Buy Side - Should we pay brokers and intermediaries a commission?

by an investor from Indiana University at Bloomington
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