What is a normal cut for sourcing deals?

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July 28, 2020

by a searcher in San Diego, CA, USA

I'm wondering what the precedent or normal range is if you bring on partners to handle sourcing of deals. I know there are companies that just full time acquire hvac for example, and they either pay employees or pay partners to source the deals. What would be a normal cut if someone brings you an interested party in selling? Is there anyway to get a "typical" range?

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commentor profile
Reply by a professional
from University of Southern California in North Palm Beach, FL, USA
Learn the best practices before you begin searching, and definitely before you outsourced to anybody for anything. If you don't know what should be done the right way how could you evaluate anybody who pitches you?
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Reply by a searcher
from Westminster College of Salt Lake City in Salt Lake City, UT, USA
I second Jason. I used to source deals for Leucadia before they sold to Jefferies & they paid Lehman. 5% on the 1st $1m, 4% on the second $1m, 3% on the 3rd $1m, down to 1% for every additional million.
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