The question every owner asks, and most get wrong
Within a few weeks of seriously considering a sale, almost every owner is approached by an M&A advisor, corporate finance boutique, or specialist broker. The pitch is reasonable: this is the largest financial decision of your life; you should not navigate it alone; we run a competitive process and the higher price more than pays our fee.
Sometimes that is exactly right. Sometimes it is not. The honest answer depends on factors most owners do not think about until afterwards.
When an advisor genuinely earns their fee
You have multiple credible buyers and want a competitive process. If your business is genuinely attractive to several types of acquirer — strategic, private equity, permanent capital, international — an advisor who can run a structured process in parallel will almost certainly produce a better headline price than you would alone. This is the cleanest case for an advisor.
You have no relationships with potential buyers. A good advisor brings a network it would take you years to build. If your starting position is a cold list and a Google search, that is real value.
The buyer-seller dynamic is adversarial. When you are negotiating against a sophisticated counterparty — a listed strategic, a large PE house — having a professional negotiator on your side levels the field.
You want to stay out of the negotiation personally. Some sellers do not want to be the person saying no to the buyer they will work with for the next year. An advisor lets you preserve the relationship by outsourcing the hard conversations.
When an advisor adds cost and friction without adding value
You already have a credible buyer in serious conversation. If a permanent-capital buyer or trusted strategic has approached you directly and the relationship is working, inserting an advisor mid-process often slows things down, raises fees, and shifts the dynamic from a relationship to a transaction. Many buyers will simply walk away.
The business is small enough that fees consume the upside. Advisor fees are usually 1.5–5% of deal value, with minimums. On a €5M deal, a €250–400k fee meaningfully changes your net proceeds. On a €40M deal, the same percentage is easier to justify.
Your buyer pool is genuinely narrow. If realistically only three or four buyers exist for your business, an advisor "running a process" mostly produces theatre. Those buyers will know each other, know they are competing, and price accordingly.
You want a quiet, confidential process. Formal processes leak. Auctions get noticed. If discretion matters more than maximum price, a structured process works against you.
What to ask before signing an engagement letter
- What is your fee structure? Retainer plus success fee is standard. Be wary of high retainers with low success fees — the incentive is reversed.
- What does the success fee look like across price points? A flat percentage is honest. A "Lehman formula" or tiered structure that pays disproportionately on the first tranches of price gives the advisor an incentive to close fast rather than push for value.
- Who specifically will work on the engagement? Pitch teams and execution teams are often different. You want the senior name in the room throughout.
- What is the exclusivity period? Most engagement letters include a tail — if you close with any buyer they introduced within 12–24 months of the engagement ending, the fee is still owed. This is normal, but the duration matters.
- What is your honest view on the buyer universe for our business? A good advisor will give you a realistic, named list. A weak one will speak in categories. The answer tells you whether they actually know your sector.
The lawyer is non-negotiable
Whatever you decide about an M&A advisor, you need an M&A lawyer with sector experience. This is not the place to use the firm that wrote your shareholders' agreement fifteen years ago. The cost of competent legal advice is small relative to the cost of bad drafting in a sale-and-purchase agreement that will govern your relationship with the buyer for years.
If you take only one piece of advice from this article: spend money on the lawyer before you spend money on anything else.
How we think about it
We work with sellers who use advisors and sellers who do not. We do not have a preference and we do not pay introducer fees. What we ask of every seller, advised or not, is the same: a clear view of what you want from the transaction, an honest read on the business, and a willingness to have a direct conversation about whether we are the right home. An advisor can help with all three. So can a good lawyer, a trusted accountant, and a few hours of honest reflection.