How much does it cost to hire a banker to help me raise $5M of capital?

April 16, 2020

by a searcher from University of Pennsylvania - The Wharton School in Austin, TX, USA

I am exploring raising capital using an investment banker. About $5M of a mix of debt and equity.

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Reply by an intermediary
from Washington University in St. Louis in Chicago, IL, USA

Hi Adel - there is of course a range depending on the complexity of the raise and how much work is needed to get ready to get the deal into market. Most investment bankers will have fees that are split between a retainer (monthly or upfront lump sum) and then the majority of the fees are charged as a success fee paid at closing, usually as a percent of the raise. Smaller capital raises such as this will typically have a higher percent than larger deals - I would expect at least 5-7%. Since you mention looking at a blend of debt and equity, you will want to make sure you find someone with experience in both worlds, as well as in smaller capital raises such as this. We do quite a bit of work in this area - would be happy to talk with you (even as a sounding board) if helpful. You can reach me at redacted Good luck!

Reply by a searcher
from Harvard University in New York, NY, USA

Jules suggestion of a Chairman or Senior Advisor is great and a prudent one if the operator has no or limited experience cutting "their own" deals. I am not talking about intellect capacity or blue-chip pedigrees, I mean the emotional and transaction deal experience to manage your emotions and the people around you to cut a fair deal including with equity partners which, at the end of the day, is a deal both sides can live with for the rest of their lives. It is sad to witness search operators panic.

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