I recently engaged with a firm to conduct cold emails on my behalf in hopes of building my direct outreach pipeline. I plan to give this individual a set of NAICS codes + tags and then have them (a) research companies, (b) build an email list, (c) create alternate domains and email them on a regular basis, and (d) send me warm leads.
They are hoping to get paid $5k upfront + the following success fees if I close the deal:
a. 3% flat for Total Enterprise Value up to $3M ($3,000,000)
b. 2% flat for Total Enterprise Value between $3M - $10M ($3,000,001 to $10,000,000)
c. 1% flat for Total Enterprise Value over $10M ($10,000,001)
The numbers are way too high IMO since the bulk of the work will come after you start the seller conversation. Good thing is I believe there is a lot of wiggle room for negotiation.
Has anyone used these types of services in the past, and if so what did the fee structure look like? I've seen 1% up to $20k but don't have a ton of experience in this space. Would it make more sense to try a flat fee structure?
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by a searcher
from INSEAD
in San Francisco, CA, USA
in San Francisco, CA, USA
1yr ago
What type of success fees are you seeing for outsourced direct outreach?
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by a searcher
1yr ago
from Ball State University in Indianapolis, IN, USA
from Ball State University in Indianapolis, IN, USA
The firm I'm working with is <$10k for the search -> LOI, then a flat fee + success fee for the LOI through close (full deal team, inclusive of DD, legal, etc.).
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by a searcher
1yr ago
in Rindge, NH 03461, USA
in Rindge, NH 03461, USA
There are 2 different models for success fees. One model is retainer plus success fee. The second is $0 retainer, 100% success fee. They are totally different models with totally different fees. If you are willing to pay an up front fee, the success fee will be much lower. If you are not willing to pay any upfront fee, the success fee will be much higher. The fee structure in the header seems high to me, especially with a $5k retainer.
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