Structuring Finder's Fees Arrangement

searcher profile

August 06, 2020

by a searcher from The University of Chicago - Booth School of Business in Sydney NSW, Australia

Hi all,

Hope you all are doing well.

I have received some very interesting leads from my river guide. These leads are not up for sale but will entertain sale conversation. However, to proceed further I want to get into a formal contract with my river guide on role & responsibility and fee arrangements. I understand that the fees is generally around 1-5% of EV. However, if someone could help me to structure this in detail? TIA.

PS: My river guide is a great guy and I want to compensate him fairly for the relationship.

Cheers,
Ankit

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commentor profile
Reply by a searcher
from INSEAD in Denver, CO, USA
Typically Lehman, or some variation thereon is what I've seen for referrals. https://www.hadleycapital.com/insights/selling-a-small-business/lehman-fee-structure/
For smaller deals I think the fees could be negotiated down a bit.
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Reply by an investor
from Illinois Institute of Technology in Pasadena, CA, USA
River guide? Standard Lehman is a little out of date and low in today's environment. However, private equity groups will offer this. For small deals, investment bankers will be higher.
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