Ten to five percent of the time we are engaged by Buyers who want us to identify and vet prospective Sellers so they do not have to waste a lot of time, it's a bit like shortlisting candidates for a job, we will screen the sellers and if they are not represented we would typically prepare suitable materials to present them to the Buyer.
Often in these cases, prospective Sellers want more specifics about the growth plans of the acquirer before considering them as potential partners in business going forward.
The main difference when we are engaged by a Buyer or a Seller is that we work for you first, for a Seller that means we will show you to a suitable number of qualified Buyers.
However, when the Buyer is paying our fee they will get a reasonable period of time to assess the Seller's suitability and we cannot show the company to other buyers until they tell us they have no further interest or a reasonable time has passed with no further action on their part to pursue this opportunity.
To summarize without going through all the steps it takes to complete a transaction if you're paying our fee you get to control the pace and actions we work at to complete a deal.
A word about Success Fees
In most cases, whoever engages us will pay a small non-creditable, non-refundable Retainer to get us started and to show your commitment to this project. A Business Advisor cannot make a living on Retainers. We depend on completing deals to earn our Success Fee which may vary depending on the situation.
Our view is that the fee is always in the deal, whether the Seller or Buyer pays. In either situation we want to see a win-win transaction.
We prefer to represent the Seller since we feel they are at the biggest disadvantage in their knowledge of the M&A process.
Alternatively, we would usually like to obtain profile information from a Buyer at no fee to them and then alert them when we have found a Seller that fits their profile.
