A success fee is a charge linked to an agreed result or transaction event. In an adviser engagement, the contract should define the event that triggers payment and how the charge is calculated.
Check whether the calculation uses enterprise value, equity value, proceeds received or another basis. Consider the treatment of assumed debt, deferred payments, earnouts and any minimum charge.
The agreement may also address a sale after the engagement ends. Read any tail provision with the payment trigger rather than assuming a fee is payable only while the mandate remains active.
Ask the adviser to explain the calculation and its interaction with retainers, other charges and expenses in writing.