M&A Advisor Fees
A transparent breakdown of investment banking and advisory fees for software company transactions from $3M to $50M+
M&A advisors rarely publish their fee structures—and for good reason. Fees depend heavily on deal size, complexity, and the likelihood of closing. But as a founder preparing for an exit, you deserve clarity on what to expect.
Typical Success Fees by Deal Size
Success fees are paid at closing as a percentage of total transaction value.
| Deal Size | Expected Success Fee | Typical Advisor Type |
|---|---|---|
| $1M – $5M | 8% – 12% | Business Broker |
| $5M – $25M | 4% – 7% | M&A Advisor |
| $25M – $100M | 2% – 4% | M&A Advisor / Investment Bank |
| $100M+ | 1% – 2% | Investment Bank |
Retainer Fees
Most M&A advisors charge an upfront retainer in addition to the success fee—typically $50,000 to $250,000, sometimes structured as monthly payments over 4–12 months.
The retainer serves two purposes:
- Covers upfront costs (valuation analysis, marketing materials, buyer research)
- Signals your commitment—advisors are wary of “tire kickers”
Why Higher % for Smaller Deals?
The work required to close a $10M deal is nearly identical to a $50M deal—same buyer outreach, same due diligence, same negotiation complexity.
The percentage compensates for the absolute dollars at stake. A 5% fee on a $10M deal ($500K) represents the same effort as a 1.5% fee on a $50M deal ($750K).
What the Retainer-to-Fee Ratio Tells You
- High retainer, low success fee: The advisor may doubt the deal will close or expects a long timeline
- Low retainer, high success fee: The advisor is confident in your deal’s attractiveness and closing probability
- No retainer: Proceed with caution—either your valuation expectations are too low, or the firm isn’t selective
Broker vs. M&A Advisor vs. Investment Bank
| Provider | Typical Deal Size | Fee Structure |
|---|---|---|
| Business Broker | Under $5M | 10% – 12% commission |
| M&A Advisor | $3M – $100M | Retainer + 2% – 7% success fee |
| Investment Bank | $50M+ | Retainer + 1% – 2% success fee |
For software and SaaS companies in the $3M – $50M range, a specialized M&A advisor typically offers the best fit.
Other Costs to Budget For
Legal Fees
Expect $50,000 – $150,000+ for M&A legal work, including purchase agreement negotiation, disclosure schedules, and closing documents.
Quality of Earnings Report
A QoE report typically costs $30,000 – $80,000. Buyers often require one, and having your own “sell-side QoE” can accelerate due diligence.
Tax Advisory
Structuring your deal for optimal tax treatment can save hundreds of thousands of dollars. Budget $10,000 – $50,000 for specialized M&A tax advice.
Frequently Asked Questions
Common questions founders ask about M&A advisory fees.
Why won’t M&A advisors give me a straight fee quote upfront?
Fees depend on factors that require discovery: your company’s complexity, growth trajectory, buyer universe, and realistic valuation range. A responsible advisor needs to understand your situation before quoting—beware of anyone who quotes a fee in the first call.
Should I choose the advisor with the lowest fee?
Rarely. The difference between an experienced advisor and a cheap one often shows up in the final transaction value. A good advisor might cost 1% more but deliver a 15–20% higher valuation through competitive tension, better buyer targeting, and skilled negotiation.
What’s a “tail” provision?
The tail protects the advisor if you close a deal with a buyer they introduced, even after your engagement ends. Typical tails run 12–24 months. This is standard and reasonable—just ensure the tail only applies to buyers the advisor actually contacted.
Are fees negotiable?
Somewhat. Retainer structure and success fee tiers are often negotiable, especially for attractive deals. But dramatically undercutting fees may signal that the advisor is desperate or doesn’t value their own work—neither is a good sign.
Considering an Exit?
We work with software and SaaS founders on transactions from $3M to $50M. No pressure, no obligation—just a straightforward conversation about your options.
Learn How We Work →
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