Plus some things about advisor pricing that will cause your eyebrows to briefly defy gravity.

Show me the incentive, I’ll show you the outcome.

Charlie Munger had a line I come back to often. “Show me the incentive, I’ll show you the outcome.”

Advisor pricing in M&A is a fairly clean example of this in action.

The fees you pay to sell your business will land somewhere between 2% and 8% of deal value. On a $20M sale, that’s the difference between $400,000 and $1.6 million. Which is, when you sit with it for a moment, an enormous range. And most of the variance isn’t market rate. It’s structural choices made right at the outset, before anyone has done any real work.

So why does this happen? Two reasons, mostly. The first is that there’s a stack of numbers, and the way those numbers interact with each other is more or less opaque to someone selling a business for the first time. The second is that every one of those numbers is negotiable, which is a thing nobody quite tells you.

Here’s what the stack looks like.

Broker or no broker.

A good broker, well-aligned, is worth what they cost. They bring a curated buyer list, create competitive tension, manage the process, and put a buffer between you and the buyer during negotiation. For a first-time seller, that buffer alone is often worth the fee.

The cost is mid-six figures, plus a softer cost: you’ve handed over pace and messaging. That’s not necessarily bad. Pace and messaging are things first-time sellers tend to mismanage when they keep them.

Going direct, you keep the success fee. Then you spend the savings elsewhere. Higher legal fees because counsel does more of the work. Tax structuring. Data room costs. And the cost most direct sellers underestimate: their own time. Long months of CEO and CFO bandwidth, while the buyer watches your monthly numbers for any sign of softness.

The success fee.

Brokered success fees come in two formats. Tiered, which lands north of $600,000 on a $15M deal at full rate. Or flat at 2–5%, with smaller deals priced toward the higher end. Expect a minimum of $250,000–$500,000 and retainers of $10,000–$30,000 a month.

The success fee itself isn’t usually the problem. The problem is what’s around it.

Things worth pushing back on:

  • Minimums set so high they become the effective rate on any soft outcome.
  • Retainers that don’t credit against the success fee.
  • Tails that capture any sale, rather than sales to named, advisor-introduced parties.
  • Success fees on the headline number rather than what you actually receive.
  • Success fees on rollover equity and assumed debt.

Each of these sounds technical. Each is worth $50,000 to $200,000 depending on the deal. None is offensive to ask about. The advisor who finds your questions offensive is not the right advisor.

$100,000 to $300,000 for a sub-$20M deal. Most firms bill hourly. The quoted figure is an estimate, not a price.

Hourly billing transfers the risk of complexity to you. If buyer’s counsel rewrites four clauses three weeks before close, the firm earns more. If the SPA goes through five rounds instead of two, the firm earns more. This isn’t because lawyers are dishonest. It’s because the structure rewards extension.

A fixed fee is the friend you want. Hourly with no cap is a position of trust that may or may not be repaid.

Tax and accounting.

$60,000–$100,000+ on a typical process. Tax structuring, diligence support, completion accounts, working capital workstreams, pre-sale reviews.

Ask for fixed pricing on the structuring memo. Ask for a cap on diligence support hours. “Deal support” priced hourly with no cap behaves the same way as uncapped legal fees.

The small things that compound.

Data room subscription. Disbursements. Specialist insurance or reports.

Each looks small. Together they’re $10,000 to $40,000. Ask for transparent pass-through billing and pre-approval on larger items.

The total.

2% to 8% of deal value. That range exists because almost every variable inside it is set in the engagement letter, before any work happens.

Which channel you used. Whether the retainer credited. Whether legals were capped. What the success fee was calculated on.

These aren’t separate questions. They’re the same question asked five times.

Show me the incentive. I’ll show you the outcome.

The fees aren’t avoidable. The clarity is yours to demand. The right time to demand it is now, before the work starts, while the atmosphere is calm and you can still hear yourself think.