Investment banking advisory services is an umbrella over four products that share a vocabulary and little else. Sell-side, buy-side, capital raising and fairness opinions are sold by the same firms to different clients with different fee shapes, and a client who does not know which one they are buying will be surprised by the timetable. This page separates them and says how each is paid for.
Sell side: a process with a deadline
Running a competitive sale for an owner who has decided to sell. Retainer plus a success fee on close, with the fee doing most of the work: $600,000 on the $12,000,000 transaction this site uses. It has a natural end, which makes it the easiest of the four to manage and to price.
Buy side: a search with no deadline
Finding and approaching companies that may not be for sale. The retainer matters far more here because the success fee is on something that may never happen, and the mandate can run for years without a natural milestone unless the parties create one.
Capital raising: a list of investors rather than acquirers
Debt or equity, where the outcome is an allocation rather than a single buyer and the fee is a percentage of what actually clears rather than of the ask. Raises frequently close smaller than the mandate said, so a fee model built on the ask is stale within weeks.
Fairness opinions: an opinion, not a process
A written view on whether the consideration in a transaction is fair from a financial point of view, usually for a board that needs it on record. FINRA Rule 5150 governs how members handle them, including disclosure of the fee arrangement, precisely because the incentives need to be visible.
Questions people ask about investment banking advisory services
What are the four products?
Sell side, buy side, capital raising and fairness opinions. Same firms, different clients, different fee shapes and different timetables.
Which one has no deadline?
Buy side. There is no process forcing a decision, so the mandate can run for years unless the parties create milestones.
What is a fairness opinion?
A written view on whether the consideration is fair from a financial point of view, usually for a board, and FINRA Rule 5150 governs how members handle them.