What is a typical finders fee?

intermediary profile

December 11, 2024

by an intermediary from University of Zürich in Zürich, Switzerland

Hello Searchers & Co,
What is a typical finders fee (5%) that one would pay to an advisor who can introduce potential targets?
We're searching in CPG (candy industry), EV $20m-40m for the manufacturing platform. We're also looking at smaller brands to add to such a platform.
I appreciate your help.
Fabio

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commentor profile
Reply by a searcher
from The University of Chicago in Chicago, IL, USA
If they are just making an introduction, a finder fee is around 1% of purchase. If they are acting as a true buy-side broker, expect a modified Lehman fee that can be 4-8%. Very big difference in the work involved between the two. Finders fee is just an intro. Broker is full search, negotiation, and guiding you through close.

Highly recommend signing as many non-exclusive finder’s fee agreements as you can. Getting intros for 1% is well worth it.
commentor profile
Reply by a searcher
from Babson College in San Diego, CA, USA
From our experience, it depends on: 1) How involved the "finder" is. Is it merely an intro or are they doing searches/origination? 2) Size of deal. For a casual intro for a medium size deal - usually 1-2%. More active origination is usually a scale...5% on smaller deals and then goes down for larger deals.
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