What's "Market" for Value-Add Advisors in a Self-Funded Search?

November 24, 2025

by a searcher from New York University in Kansas City, MO, USA

I’m running a self-funded search and a few former colleagues I respect have asked about getting more involved. Up to this point, I’ve kept things informal - a mix of potential small-check strategic capital partners, mentors, and advisors - so I haven’t seriously considered more structured roles with compensation expectations. I’ve had direct exposure to structuring these at the VC/PE fund level and within sponsor-backed companies, but not at the self-funded search / SMB acquisitions. What I’ve read so far: - Small “advisor shares” (1–5% of total equity) or similar carry, typically vesting over time or at exit. - Advisory compensation for specific work (board participation, deal support, etc.) priced at 1–2x the cash-market equivalent, paid in equity rather than cash, and diluting alongside other investors. What’s considered market rate and standard terms here? What should I consider that is unique to SMB acquisitions?

Reply by a professional
from University of California, Hastings College of Law in Petaluma, California, United States

I would say, in self-funded search, “market” for value-add advisors is far more conservative than in VC/PE, and in line with what you mentioned. Equity is the norm, not cash. Light-touch strategic advisors typically sit around 0.5%–1%, active deal or transition support lands in the 1%–2% range, and only high-impact operating involvement reaches 3%–5%. Vesting is usually tied to deal close or a 24–36 month schedule. What I think is unique in SMB/ETA is that execution risk is overwhelmingly behavioral, not necessarily strategic, so the most valuable advisors are the ones whose style and experience align and enhance how the CEO and team actually operates. The right behavioral fit to drive value immediately after close can materially de-risk diligence, transition, and year-one execution. That seems to be a bit unique to SMB/ETA simply because ever move the new CEO makes is riskier, and less forgiving.

Reply by a professional
in Austin, TX, USA

In self-funded searches, advisor economics are much simpler than VC or PE. Most value-add advisors land in the one to three percent equity range, diluted with everyone else, and vesting either over two years or upon exit. Heavy involvement such as weekly deal help or post-close operating support might justify four to five percent, but that is the top of market. The biggest nuance in SMB deals is that advisor value is front-loaded during diligence and the first hundred days, so milestone-based or short vesting schedules make far more sense than long-term time vesting. Also be explicit that equity is replacing cash since liquidity is tight post-close. Keep the scope tight, the equity small, and the incentives tied directly to value creation.

+5 more replies.

Join the discussion