Selling a business is one of the most important financial transactions an owner can undertake. Choosing the right advisor to partner with can greatly impact your valuation and experience.
Many assume only two options exist – an M&A advisor or a business broker. However, business intermediaries offer a flexible middle-ground. In this article, we’ll compare the services of M&A advisors, intermediaries, and brokers so you can select the best fit.
M&A Advisors
M&A advisory firms are ideal partners for larger, complex transactions from $10 million up to $500 million in value. Advisors offer extensive services including:
- In-depth valuation analysis and financial modeling
- Tax, legal, and deal structuring expertise
- Targeted buyer research and outreach
- End-to-end transaction management
- Guidance on negotiations, due diligence and closing
- Assistance with leadership transition
Top M&A advisors utilize their deep experience to maximize the final sale price and optimize deal terms for clients. They help navigate the intricacies of larger deals.
Business Intermediaries
Business intermediaries provide flexible support on mid-market transactions typically from $5 million to $100 million in size. Useful services include:
- Light-touch valuation guidance
- Marketing materials creation
- Buyer research and outreach
- Transaction coordination and project management
- Closing process navigation
Intermediaries offer a blend of advisory services and transaction execution. The level of support can adapt based on unique needs. Their fees are also flexible – hourly, success-based, or hybrid models.
Business Brokers
For sales under $5 million in value, a business broker can provide an efficient and cost-effective option. Brokers offer services like:
- Comparable business valuations
- Marketing to targeted buyer databases
- Coordinating due diligence and site visits
- Drafting purchase contracts
- Navigating the closing process
Brokers act akin to real estate agents, helping to facilitate transactions for smaller businesses. Their success-based fees are economical for these types of deals.
The Comparison
Here is an overview comparing the three partner options across key attributes:
| Attribute | M&A Advisor | Intermediary | Business Broker |
|---|---|---|---|
| Deal Size | $10M+ | $5M – $100M | <$5M |
| Services | Extensive advisory | Flexible blend | Transaction execution |
| Expertise | Very specialized | Moderate specialization | Generalist |
| Fees | Retainer + success | Flexible models | Success-based |
| Buyer Outreach | Extensive research | Moderate research | Network and databases |
| Post-Close Involvement | Leadership transition | Limited | Minimal |
Assess Potential Partners
Selling a mid-market or larger private company is complex. Take time to carefully evaluate potential partners based on deal size, specialized expertise required, and services offered. The right guidance can maximize your valuation and outcome.
