How common is it to get contingent fee advisors?

by a searcher from University of Arkansas at Fayetteville

4 years ago

I've been reading some literature from a group that is claiming all of their advisors are contingent fee based (i.e. their lawyers, lenders, and CPAs only get paid once the deal closes). Is this common in your experience? Is there anyone on here that is in an advisory role that is open to this structure?

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searcher from University of California, Berkeley - Haas School of Business

Not uncommon for advisors to be paid in shares or cash. Retainers, not so much unless you are hiring an attorney; but thats more of a "consultant". To be clear, my context of advisor is someone like a board member but without votes or fiduciary duties (hence no D&O req). Some use advisors as such and some expect work on top. Latter would have to be vetted separately from only advising.

3 years ago | like reply | 0 likes

professional from Yale University

Depends. It depends on whether there are good enough reasons for the advisor to take the mandate (most common reason is: the pipeline is dry) and more importantly whether they have the confidence that the transaction will get consummated. It also depends on the competitive landscape. The willingness do such a deal in my experience seldom depends on whether the advisor is big or small. And relationships matter, hugely.

3 years ago | like reply | 0 likes

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