When it’s time to sell your business, choosing the right M&A advisor or broker is one of the most important decisions you’ll make.
The right partner can help maximize your sale price and guide you through a successful exit, while the wrong one could cost you time, money and opportunities.
We’ve seen this play out hundreds of times through interviews with founders who’ve sold their businesses. Some have horror stories about advisors who didn’t know what they were doing, while others credit their advisor as making a crucial difference in achieving their exit goals.
How to choose a business broker to sell your company
Here are 10 ways to vet potential advisors:
1. Know what kind of support you need
Many founders use the wrong terminology when seeking help, which can lead them in the wrong direction. Before you start vetting advisors, understand the different types of professionals who can help sell your business.
M&A advisors typically help smaller businesses, or sales up to about $20 million. While these professionals are sometimes called brokers, most prefer the term “advisor.”
Investment bankers focus on larger deals, typically sales larger than $20 million, and some much larger than that.
If your business brings in 6 or 7 figures of revenue, you likely want an M&A advisor, not an investment banker. (Unless you’re selling software, which can sell for high multiples; in that case you might work with an investment banker even if you’re only bringing in 7 figures of revenue).
If you’re playing in the 8-figures-of-revenue space, then an investment banker might be a better fit for you.
Need help choosing an M&A advisor?
That’s what we’re here for! We’ll match you (for free) with an advisor who specializes in sales of your size.
2. Look for experience in your industry
One of the most critical factors is finding an advisor who specializes in your type of business.
If you run an online business, for example, you don’t want to work with a broker who primarily sells local brick-and-mortar businesses.
Why? Because advisors who focus on digital businesses:
- Understand how to value your business appropriately (some types of online businesses command higher sale multiples)
- Know what buyers look for in your type of company
- Have relationships with the right buyers
- Can spot opportunities others might miss
Some brokers say they can sell any type of business. But in reality, selling a SaaS company requires different expertise than selling a restaurant. Work with someone who has proven experience in your specific industry.
3. Ask for recommendations from other founders
Quality advisors should be able to provide references from founders who’ve successfully sold similar businesses. Ask to speak with previous clients, particularly those who sold companies like yours.
When you talk with those references, ask:
- What was it like working with this advisor?
- Did they deliver what they promised?
- Would you use them again?
- What surprised you about the process?
- What could have been better?
If you don’t have friends who’ve exited, lean on our M&A advisor matching service! We talk to a lot of founders who’ve sold, so we hear the goods and bads about each advisory firm. And we only suggest advisors who come recommended by other founders.
4. Understand their fee structure
M&A advisors typically use one of two fee models:
Success fee only: They only get paid when your business sells, usually a percentage of the sale price.
Up-front fees or retainer fees, plus success fee: Some firms charge preparation fees before the sale, plus a success fee when it closes. This is more common for specialty firms and larger deals.
Neither model is inherently better – it depends on what you’re looking for. Success-fee-only arrangements align incentives, since the advisor only gets paid if you sell. And typically that makes the most sense for founders selling for under $1 million.
But firms that charge up-front fees often provide more comprehensive support with preparing your business for sale, or perhaps they can offer more niche expertise. Sometimes that’s worth paying for, even if you’re selling a smaller business.
Here are more details on how M&A advisor fees work.
5. Learn about their team structure
Advisories typically operate in one of two ways:
Dedicated advisor model: You work with one advisor throughout the process. This creates stronger relationships and more continuity. Some dedicated advisors have support teams behind them, while others operate solo.
Team model: In this setup, different specialists handle different phases of the sale. While this means working with multiple people throughout the sale process, you benefit from specialized expertise at each stage.
Consider which model you prefer, and ask detailed questions about who you’ll work with throughout the process.
6. Request a valuation
Many advisors offer free valuations before you commit to working with them.
This gives you:
- A chance to experience their work style
- Insight into what they believe your business could sell for
- An understanding of their process and expertise
- Ideas about how they might encourage you to optimize ahead of a sale
Remember that a valuation isn’t a guarantee – it’s an estimate of what your business might sell for under optimal conditions.
7. Do a vibe check
You’ll work closely with your advisor for months, often in high-pressure situations. Trust your instincts about whether they’re the right fit.
Consider:
- Do you trust them to represent your interests?
- Are they someone you can speak openly with?
- Do they listen well and address your concerns?
- Can you imagine sharing sensitive details about your business with them?
- Would you feel comfortable calling them in a crisis?
If something feels off, pay attention to that feeling. Your relationship with your advisor is too important to ignore gut instincts about compatibility.
8. Review their marketing approach
Ask how they’ll market your business to potential buyers.
Quality advisors should have a clear strategy for finding and vetting buyers, and know how to generate competitive interest.
One of the best ways to increase your sale price is attracting multiple offers. Competition gives you leverage. So ask questions about how each advisor will go about reaching out to and drumming up interest from potential buyers.
9. Ask about their track record
Asking specific questions about other deals each advisor has worked on can offer insight into how they’d market and sell your business.
Consider inquiring about:
- Recent deals they’ve worked on in your price range
- How long it typically takes to sell a business
- Percentage of listings that actually sell
- Common reasons they see for deals falling through
- How the sale price for their last few deals compared to the initial valuation
10. Get aligned on expectations
One of the reasons it’s worth investing in an M&A advisor is because they can take parts of the sale process off your plate. That means less work for you — so you can continue to focus on maintaining or improving business performance.
So how much of this process will an advisor run for you? That can vary depending on which business broker you work with.
A few questions you might ask to better understand this:
- Do you vet buyers before I speak to them, so I don’t waste time with tire-kickers?
- Will you help me prepare for buyer calls, including thinking through answers to tricky questions?
- If I need a lawyer or a financial professional alongside you, is it reasonable for me to expect you to find those people, or will I do that part?
- What’s your role during due diligence?
- Is there anything else you’ll do that will take work off my plate that I’m not thinking about?
- What response time can I expect from you when I have questions, or a buyer needs something?
- Who handles urgent issues: you, or me?
While an advisor’s expertise is crucial, their ability to be responsive and present throughout your sale process can significantly impact your experience and outcome.
Next steps for finding an M&A advisor who’s right for you
Need help finding an M&A advisor who’s a fit for your business?
We’ll match you with vetted advisors who have experience selling companies like yours. Our recommendations come from interviewing hundreds of founders about their sales experiences, so we know which advisors deliver results.
The right M&A advisor can be the difference between a good exit and a great one.
More tips for working with brokers and M&A advisors
It’s smart to learn as much as you can about this before committing one way or the other.
Here are a few other posts we’ve published about selling a business with a broker:
