Compare M&A Advisor Fee Proposals

To compare M&A advisor fee proposals, convert every structure into expected seller dollars at realistic transaction values. Then compare payment timing, retainers, expense policy, cap, minimum fee, tail clause, and included work. A lower percentage can still be worse if the proposal includes upfront fees, open-ended expenses, or a broad post-termination tail.

Lyndon Advisory’s proposal is simple: 2.5% of enterprise value, capped at US$750,000, with no retainer, monthly fee, or expense recharge. For the full owner process around selling a business, the fee proposal should be evaluated alongside buyer quality, confidentiality, materials, negotiation, and closing certainty.

Fee Proposal Comparison Table

Item to compare	Why it matters	Seller-favorable answer
Fee basis	Enterprise value vs equity value changes dollars	Defined in writing before launch
Retainer	Seller may pay before value is proven	None, or fully credited at closing
Expense recharge	Costs can grow outside the headline fee	None, or written expense cap
Minimum fee	Percentage may understate real cost	Dollar outcome shown at likely values
Fee cap	Protects proceeds as value rises	Clear maximum advisory fee
Payment trigger	Signing and closing are not the same	Closing only
Tail clause	Can create post-termination liability	Narrow named buyers and short duration
Scope	Fee is only value if work is real	CIM, model, buyer map, outreach, negotiation

Corporate Finance Institute’s Lehman Formula overview explains how tiered investment-banking fees can be calculated. Sellers should translate any formula into dollars at their likely deal size before signing.

Model the Same Deal Under Each Proposal

Enterprise value	Proposal A: 3% uncapped	Proposal B: 2.5% capped at US$750,000	Difference
US$10M	US$300,000	US$250,000	US$50,000
US$25M	US$750,000	US$625,000	US$125,000
US$50M	US$1,500,000	US$750,000	US$750,000
US$100M	US$3,000,000	US$750,000	US$2,250,000

This does not mean every higher-fee advisor is wrong. It means a seller should demand evidence that the higher fee is likely to create more than its cost through buyer reach, competitive tension, negotiation, and closing certainty.

The SBA business valuation guide emphasizes financial condition, assets, and market evidence when assessing value. Sellers should use the same discipline on advisor proposals: compare evidence, not promises.

“The cleanest comparison is not a percentage. It is seller net proceeds after fees, expenses, debt, escrow, tax, and timing risk. A proposal should make that calculation easier, not hide it.”

— Daniel Bae, Founder & CEO, Lyndon Advisory

Included Work Matters

Workstream	Why it belongs in the proposal
Valuation analysis	Sets realistic range before buyer conversations
Teaser and CIM	Gives buyers enough quality information without premature disclosure
Financial model	Lets buyers underwrite normalized earnings and growth drivers
Buyer mapping	Identifies strategic, PE, family-office, and cross-border buyers
Targeted outreach	Creates buyer competition beyond inbound listings
Negotiation support	Protects price, structure, exclusivity, and closing conditions
Diligence coordination	Keeps buyer questions moving without losing control

For the broader framework, read Transparent M&A Advisor Fees, Success-Fee-Only M&A Advisor, and M&A Advisor Fees and Seller Net Proceeds.

Practical Next Step

Situation	Best next step
You have two fee proposals	Model the fee impact
You want a capped-fee benchmark	Review Lyndon fees
You are deciding whether to launch	Submit a confidential valuation inquiry