Anyone have experience using finders fees in their search?

searcher profile

April 13, 2025

by a searcher from Harvard University - Harvard Business School in Jeddah Saudi Arabia

If anyone has set up an incentivized structure to generate deals, I’d really appreciate hearing your experience or sharing relevant material. Im currently searching in Saudi Arabia (relatively new and emerging market for search funds). Most of the potential acquisition targets here aren’t listed anywhere - they can only be found through networking and relationships. I’ve been meeting individuals with deep local networks, and I’ve budgeted for finder’s fees to help surface leads. I’m looking for a structure that actually motivates people to bring quality opportunities. Getting the deal across the finish line is my job, but I need help finding those hidden gems Most of what Ive seen so far is the flat fee + success fees model, which feels more like a buy-side advisor setup. this is not what I’m after since I’m already paid to do the search. I’m more interested in milestone-based incentives that reward progress (like info sharing, meetings, LOIs), even if the deal doesn’t close. Would love to hear what’s worked for others.
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commentor profile
Reply by a professional
in Jaipur, Rajasthan, India
When someone is not working exclusively for you, they would be happy to go with a finder's fee, as they would be sharing deals with others as well. This gives you a lower probability of closing the deal as multiple people are looking at it. When someone is working exclusively for you, they might ask for a certain retainer fee + success fee. To calculate the success fee, a lot of people use the Lehman formula, which says the following: 5% of the first $1 million involved in the transaction 4% of the second $1 million 3% of the third $1 million 2% of the fourth $1 million 1% of everything thereafter (above $4 million) This is for closing the deal, and not just intro and see which is something that you can decide based on what you feel is the best.
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Reply by a searcher
from University at Buffalo, State University of New York in New York, NY, USA
You can pay the finder fee if the deal materializes.
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