Finders Fee - Typical Terms

by a searcher from New York University - Leonard N. Stern School of Business

1 year ago

Hi all,

Can anyone share typical recent finders fee terms (percentage of enterprise value, different tiers for broker lead vs. proprietary lead, etc.) that worked in incentivizing intermediaries to help source proprietary deal flow?

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intermediary from Arcadia University

Who are you paying finders fees to? Are they licensed? If they are not licensed, you need to be careful about paying success-based fees or commission like fees. Depending on the transaction, real estate rules and securities rules are very strict about paying unlicensed or unregistered finders. I would pay what seems fair and what they agree to. Just be fair and cultivate the relationship. Finders could also find new customers and new vendors. So; they need to believe they will be compensated fairly for sharing their connections.

1 year ago | like reply | 0 likes

searcher from Washington University in St. Louis

It depends on the amount of work involved. If it is a referral with not much work we have seen 1-3%. If the banker/broker is doing their own out reach for your on a proprietary basis then we see a Lehman style sliding scale fee structure.

1 year ago | like reply | 1 like

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