Finder’s Fee

December 11, 2025

by a searcher from University of Akron in Columbus, OH, USA

I need some help: At the beginning of 2025, my friend mentioned to me that he had a friend who was attempting to sell her company off-market. He passed along her number and I reached out. He said he "would like a piece of the deal if it closes." I submitted an LOI in February, which was initially rejected... the seller said she she wasn't ready to sell. I kept in touch with the seller throughout the year and in November she is now ready. I've submitted an LOI and expect the deal to close in Feb. 2026. I reached back out to the friend to invite him to invest in a small percentage of ownership and he is now requesting a standard finders fee that he would roll into equity. I don't recall discussing a finders fee, only that he "would like a piece of the deal". I'm curious to know if others would also expect to pay a finders fee to a friend who passed along a tip on a company ready to sell.

Reply by a professional
from York University in Toronto, ON, Canada

I'll leave aside whether there's a legal obligation to give a finder's fee in this scenario. Depending on jurisdiction, a verbal agreement can be binding, consult with a lawyer, etc etc Deal flow is everything in business buying so this person provided tremendous value just by introducting a potential lead to you. So I think morally something is owed though have to make sure it's structured correctly because "finder's fees" are also subject to legal/regulatory scrutiny

Reply by a searcher
from Massachusetts Institute of Technology in Los Angeles, CA, USA

This is tough; might risk the friendship/relationship too (money tends to do that); if the relationship is a strategically important one, either offer 1% cash value of the deal (but not as equity) or an opportunity to invest cash. Otherwise, you can play the "We had nothing in writing card" if you're okay with the turn that might take.

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