Choosing an advisor
Business broker, M&A advisor or investment banker — which should sell your company?
What each one actually does, the size ranges they serve, how they charge, and the questions to ask before you sign
By Michael D. Rubin, CEO & Founder · September 2026 · 1,611 words
Also answersShould I hire a business broker, an M&A advisor, or an investment banker to sell my company?
Roughly: business brokers sell small owner-operated businesses, M&A advisors sell lower middle market companies between about $3 million and $100 million in revenue, and investment banks work above that. The titles are not regulated in any meaningful way, so the label matters far less than what the firm actually does — and the questions below will tell you that faster than any description will.
What each one typically does
| Business broker | M&A advisor | Investment bank | |
|---|---|---|---|
| Typical company | Under ~$2M revenue, owner-operated | $3M–$100M revenue, some management in place | $100M+ revenue, or a specialist mandate |
| Typical buyer | Individuals, often SBA-financed | Strategic acquirers, private equity, family offices, funded individuals | Institutions, corporates, large sponsors |
| How the company is marketed | Public listing sites | Blind profile to a screened buyer database, then listings if needed | Targeted process to a curated buyer list |
| Valuation approach | Rule-of-thumb multiples | Recast earnings, comparable transactions, sometimes formal appraisal | Full financial modeling |
| Fee model | Success fee, higher percentage | Success fee, often with a scale that falls as size rises | Retainer plus success fee |
| Who runs your deal | Usually the person you met | Varies — this is the question to ask | A team; the senior banker may not be in the detail |
Where the real difference is
Not in the title. In four things:
- Who your buyers will be. A firm that markets only on public listing sites reaches individual buyers. A firm with a buyer database, capital-group and private-equity relationships reaches acquirers who pay strategic prices. Ask directly which one describes them, and ask to see the last five buyers they sold to.
- Whether a principal handles your transaction. Plenty of firms are sold by a senior person and delivered by a junior one. Ask who negotiates, by name, and what happens when it gets difficult.
- How many engagements they carry at once. A firm with sixty live listings is running a marketplace. A firm with six is running your transaction.
- Whether they will decline. A firm that has never turned down an engagement is a firm that lists rather than sells.
How fees work
Most sell-side engagements in the lower middle market are success-fee based: a percentage of the transaction value, payable when the sale completes. The percentage usually falls as the transaction grows.
Some firms charge a monthly retainer or an upfront work fee. That is not automatically wrong — it funds real work and filters out sellers who are not serious — but you should know what it buys and whether it is credited against the success fee.
Our own structure is 100% performance based: an industry-standard success fee if and when the company sells, and nothing owed if it does not. We publish it, which almost nobody in this industry does, on our fees page.
The questions worth asking about any fee are: what is the percentage and does it fall with size; is there a minimum fee, and what is it; is anything payable if the sale does not complete; what happens if you withdraw; and — the one sellers miss — what is the tail period, during which a fee is still owed if you later sell to someone the firm introduced.
The engagement letter clauses to read twice
- Term and exclusivity — how long, and what it takes to end it
- Tail period — how long after termination a fee is still owed, and to which buyers it applies
- Fee scale — the percentage, whether it falls with size, and any minimum
- What counts as transaction value — does it include debt assumed, real estate, an earnout, a consulting agreement?
- Termination — notice period, and what is owed on termination
- Who does the work — whether the people you met are named in the document
Ten questions to ask before you sign
- How many companies like mine have you sold in the last three years?
- Can I speak to two sellers you represented, including one where the sale did not complete?
- Who specifically will negotiate my transaction, and who will run it day to day?
- How many live engagements do you carry at once?
- How will you market my business, and what will the blind profile say?
- How do you qualify a buyer before they see my financials?
- What is your fee, when is it payable, and what is the tail period?
- What would make you decline this engagement?
- What do you think my company is worth, and what would change that number?
- What is the biggest risk to this transaction, and what do we do about it now?
The last two questions are the ones that separate firms. An advisor who cannot tell you what would derail your specific transaction has not thought about your specific transaction.
When you already have a buyer
This deserves its own note, because it is the most expensive situation an owner can walk into. A single buyer with no competition has no reason to bid against anyone, and every reason to take their time and renegotiate.
Engaging an advisor at that point is not about finding buyers you already have. It is about establishing what the company is actually worth, creating the credible possibility of an alternative, and having somebody else absorb the negotiation so the relationship survives it. Read what to do with an unsolicited offer.
The short version
Match the firm to the size and the buyer type, not to the job title. Insist on knowing who will do the work. Read the tail clause. Ask what would make them say no.
And whichever firm you choose, start from a real number rather than a hope — a confidential valuation before you sign anything puts you in a completely different conversation.
Where each type of firm actually adds value
It is easy to read a comparison like this as an argument that bigger is better. It is not. A boutique firm with six live engagements gives a $10 million company more attention than an investment bank will, and an investment bank gives a $300 million company capabilities a boutique cannot match. The failure mode is a mismatch in either direction.
The practical test is buyer reach. Ask each firm which specific buyers they would approach for your business, and why those buyers would pay a premium for it. A firm that can name six plausible acquirers in the first meeting has thought about your company. A firm that talks about listing sites and "our extensive network" has thought about your engagement. That difference is worth more than any of the categories in the table above.
How to check the answers you are given
Every firm will say they have buyers, run a competitive process and get a great result. These are the checks that separate the claim from the practice.
- Ask for the last five closings, by sector and size. Not the best five — the last five. A firm that will not answer is telling you something.
- Ask to speak to a seller whose transaction did not complete. Any firm with volume has one. How they talk about it is the most informative reference you will get.
- Ask how many buyers saw the last company they sold, and how many letters of intent it produced. One is a negotiation; five is a process.
- Ask what they would decline. A firm that takes everything is running a listing service.
- Ask who writes the confidential information memorandum, and to see a redacted example. The quality of that document is the quality of the firm.
Warning signs
- A valuation far above the others, given quickly. Quoting high to win a listing and reducing later is a known pattern in this industry.
- Pressure to sign at the first meeting. A serious firm expects you to take the engagement letter to your attorney.
- A tail period of two years or more, applying to any buyer rather than to buyers they introduced.
- Vagueness about who does the work. If the person selling you the engagement will not name the person running it, assume they are different people.
- No process for qualifying buyers financially. This is where confidentiality is either real or theater.
- Reluctance to put the marketing plan in writing. If it cannot be written down, it is not a plan.
What the engagement letter should say
You are entitled to have all of this in the document rather than in the conversation:
- The fee percentage, the scale, any minimum, and exactly what counts as transaction value
- The term, and how either side ends it
- The tail period, its length, and that it applies only to buyers the firm actually introduced in writing
- What the firm will do — marketing package, video, buyer database, listings, screening — as obligations, not aspirations
- Who negotiates, by name
- What happens to your confidential information if the engagement ends
Our own answers, for comparison
It would be unhelpful to publish a checklist and then not answer it. So: we are an M&A advisory firm working with Texas companies between $3 million and $100 million in revenue. Our fee is entirely success based and is published. We take a small number of engagements at a time and a partner of the firm is in every negotiation. We go first to our own database of buyers, capital groups and private equity groups, and only then to public listings. We publish every closed transaction by name, and we will introduce you to past clients on request.
And we decline engagements — when the numbers do not support the owner's expectation, when the records will not survive diligence, or when the honest advice is to wait a year and prepare. That conversation costs nothing: ask for an opinion of value.