Mergers and acquisitions advisory firms are not one market and cannot be ranked across it. Four bands sell what looks like the same service at very different transaction sizes, and the fee arithmetic decides which band will give a process real attention. Choosing across bands is the most common and most expensive mistake an owner makes, and one calculation prevents it. This page sets out the four.
The four bands
Business brokers, mostly listing-driven at the smallest end. Boutique advisers running full processes in the lower mid-market. Middle-market investment banks with sector teams and wider reach. Bulge-bracket banks, whose economics work on very large transactions. Each is competent in its own band and awkward outside it.
The calculation that places you
Work your fee before the first meeting. On a $12,000,000 sale a 5% success fee is $600,000: a serious mandate for a boutique, a rounding error at a large bank. Attention follows economics rather than intention, and the number tells you which conversations are worth having.
What to ask whichever band you are in
Who runs it day to day by name, how many deals of your size that person closed last year, which buyers on their list you would not have found, and the fee structure including crediting and any minimum. All four are answerable in a first meeting and none is in a league table.
The failure at each end
Too small a firm on too large a deal produces a thin buyer list and a process that leaks. Too large a firm on too small a deal produces a junior team and a mandate deprioritised the moment something bigger arrives. Both are visible in advance from the fee arithmetic.
Questions people ask about mergers and acquisitions advisory firms
How do I find the right firm?
Work your fee first. On a $12,000,000 sale at 5% that is $600,000, which places you in a band and tells you which conversations are worth having.
What are the four bands?
Business brokers, boutique advisers, middle-market investment banks and bulge-bracket banks. Each is competent in its own band.
What goes wrong across bands?
A thin buyer list at one end, and a junior team on a deprioritised mandate at the other. Both are predictable from the fee.