M&A Knowledge Base
Business Broker vs. M&A Advisor
Choosing the right representation is critical to your outcome. Understanding the fundamental differences between a business broker and an M&A advisor will help you make the right decision for your business sale.
Side-by-Side Comparison
Business Broker
- Deal Size: Under $2M typically
- Approach: Listing-based, public marketing
- Buyers: Individual buyers, first-time acquirers
- Deal Structure: Simple asset or stock sales
- Fees: 8–12% success fee
- Process: List, show, negotiate, close
M&A Advisor
- Deal Size: $3M–$100M+
- Approach: Targeted, confidential outreach
- Buyers: PE firms, strategics, family offices
- Deal Structure: Complex — earnouts, rollover, seller notes
- Fees: Retainer + 3–5% success fee
- Process: Valuation, CIM, auction, LOI, DD, close
Common Questions
Frequently Asked Questions
What is the difference between a business broker and an M&A advisor?
Business brokers typically handle smaller transactions (under $2M) using listing-based approaches similar to real estate. M&A advisors manage larger, more complex transactions ($3M–$100M+) using targeted, confidential outreach to strategic and financial buyers with sophisticated deal structures.
When should I use an M&A advisor instead of a broker?
If your business is valued above $3M, has complex operations, requires sophisticated deal structures (earnouts, rollover equity, seller financing), or needs exposure to PE firms and strategic acquirers, an M&A advisor is the appropriate choice.
How are M&A advisors compensated?
M&A advisors typically charge a retainer fee plus a success fee based on the transaction value (usually 3–5% for transactions in the $3M–$50M range, with the percentage decreasing as deal size increases). Brokers often charge higher percentages (8–12%) on smaller transactions.
Do M&A advisors get better prices than brokers?
Generally, yes — for businesses that fit their profile. M&A advisors create competitive auction dynamics, access institutional buyers, and negotiate more sophisticated deal structures. The combination typically results in higher total consideration, even after accounting for advisory fees.
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