Sell-side Broker Comp?
Hey all,
Do sell-side business brokers typically get paid on total purchase price (including seller notes) or just on cash at closing? I'm trying to get a sense on what is market.
Thanks!
Nick
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by a searcher
from Purdue University
in Indianapolis, IN, USA
in Indianapolis, IN, USA
8mos ago
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by an intermediary
7mos ago
from Clemson University in Raleigh, NC, USA
from Clemson University in Raleigh, NC, USA
Disagree. The fee is based on negotiating the terms and conditions the seller ultimately accepts. If I took commission over time on contingent payments half of my time would be consumed chasing sellers. If they think the contingent payments are at unreasonable risk they shouldn't accept them.
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by a searcher
7mos ago
from Marquette University in Minneapolis, MN, USA
from Marquette University in Minneapolis, MN, USA
Total consideration is standard. Usually the success fee on earnouts is paid when it is truly earned-out, but many times a flat fee on that amount is negotiated to avoid the hassle of tracking it. It has to be total consideration, otherwise brokers leave themselves too exposed to weird financing structures and contingencies (with no control).
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