Would anyone here be willing to pay a small fee for getting vetted deals?
August 09, 2022
by a searcher in Thousand Oaks, CA, USA
I have more deal flow than I can handle. Also, some of the opportunities that are perfectly good don't meet my acquisition criteria. I get on calls with qualified motivated sellers, usually for about 15 to 45 minutes, and then can't acquire them.
If I were to hand off these vetted qualified leads, plus my notes taken during any/all calls I had with them, and make an introduction between you and the seller, would anyone pay for that type of lead? If so, how much?
from University of Pennsylvania in Indianapolis, IN, USA
Long story short:
Yes, that is commonly done and falls under the purview of investment banking, specifically "merchant banking." You get paid a success fee for making a buyside introduction.
Longer version of the story:
Yes, serious acquirers will pay for buyside deal origination on a success basis. A large part of my career has involved (and still does involve) doing exactly this with middle market companies. Most deals are "half-baked" as they are not in a sell-side process and they would need to have enough scale to justify a buyside/finder/success fee, but your best bet would be to get the information, which MUST include at least stated financials, then package/list the deal here anonymously, provide anonymous overviews and then get a success fee agreement in place prior to making the introduction/disclosing the company name.
Depending on the scale, you could also spend some time looking for PE offices that have similar companies or like that industry, reach out and make a similar introduction.
from Georgia Institute of Technology in Atlanta, GA, United States