Typical traditional search fund Buy-Side Referral Fee Agreement

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August 11, 2023

by a searcher from Columbia University - Columbia Business School in New York, NY, USA

Hi all,
As I am starting my search, I will sign bunch of buy-side referral fee agreements. What are the typical terms you see? and most importantly what is the typical % of "consideration" paid and min. fixed $ (e.g. max of $x k and y% of Consideration)

what is typical x and y here? Lastly, consideration meaning deal value, is it equity paid or total EV paid?

THANK YOU all!

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Reply by a searcher
from University of California, Berkeley in Seattle Metropolitan Area, WA, USA
Is it strictly paying for deal flow as referral? Or including other services/connections? Really depends on that. I think the terms really dictate how either wide or connected their networks are - seen anywhere from 2-10% or sliding scales for size of deals (ex: 10% of deal EV max of $25k, 7% of deal EV above that with cap and then 3% on anything greater than the next cap).
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Reply by a searcher
in Portland, OR, USA
Many use a reverse Lehman starting at 5 or 6. Many also want money up-front. Please let us know what you find as you go forward.
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