Any really great buy-side business broker experiences?

searcher profile

December 13, 2021

by a searcher from Duke University - The Fuqua School of Business in Atlanta, GA, USA

I've heard about the potential for finding a great business broker to act as a channel partner alongside traditional search efforts, who will funnel opportunities to the searcher on a contingent fee basis. Any particularly great experiences with individuals in the space?

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commentor profile
Reply by a searcher
from Pennsylvania State University in Atlanta, GA, USA
My experience was overall positive, as that is how I sourced my deal, but there were hiccups along the way. My biggest advice would be to communicate very openly that you will be actively looking for deals yourself and only are willing to pay a success fee on proprietary deals that he sources (assuming that is how you feel). Early on, I had issues where my broker would send me deals from Biz Buy Sell expecting that those qualified as success fee deals (when I had obviously already seen them), and there was another instance when he was mad I was processing NDAs myself and not funneling all new deals through him, even if I sourced them. Personally, I think I was 95% transparent about my intentions to actively search myself, but should have been 100% - that may have avoided the tension. That said, the Company I bought came about because my broker's friend was the seller and he gave my broker and 2 others an early look before posting widely.... which is exactly what I hoped for when I entered into the agreement.
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Reply by a searcher
from Georgetown University in Waterloo, ON, Canada
Great experience from my side. Buy-side broker sourced a proprietary deal and is helping us through diligence and negotiation. We are in for a reasonable multiple and looking towards closing a great deal. One distinct advantage is having the middle-man to assist in negotiation and play the bad guy on tough terms.

All said, there is a lot luck to what they will find, similar to any proprietary process.

Agreed with what Adrian said about transparency and making sure there is clarity up front on what constitutes in/out of scope for them. Ensuring that interests align well (focus on close) is fundamental.

Make sure you interview plenty of advisors to get an idea of market rate and what is negotiable. Choose one with a track record in the industry/size you are targeting.
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