When you’re selling, merging, or acquiring a business, one of your first questions will be:
“How much does an M&A advisor charge?”
That’s a smart question — because M&A advisory fees can vary widely depending on deal size, fee structure, and complexity. Smaller transactions often face higher percentage fees, while larger deals have lower percentages but higher total costs.
This comprehensive guide breaks down M&A advisory fees by deal size, explains how advisors charge, and helps you understand which fee structures save you money.
Table of Contents
- Understanding M&A Advisory Fees
- Our M&A Advisory Fee Structure Explained
- Lehman and Double Lehman Formulas
- Sell-Side vs Buy-Side M&A Advisory Fees
- Examples: How Much You Save
- Business Broker vs bizadvisoryboard M&A Advisory
- Factors That Affect M&A Advisor Fees
- Benefits of Working with a Transparent Advisor
- Why Choose BizAdvisoryBoard
- Frequently Asked Questions (FAQs)
Understanding M&A Advisory Fees
An M&A advisor guides business owners through one of the most significant financial events of their lives — selling, buying, or merging a company.
Here’s what a professional M&A advisor typically does:
Values your business and prepares it for market.
Creates a buyer list and generates competition for your company.
Manages the transaction process, from marketing through negotiations.
Handles due diligence and closing, ensuring you get the best possible deal.
But what does an M&A advisor charge for all this?
That depends on the M&A advisory fee structure, which varies across firms and deal types.
How M&A Advisors Charge: Understanding Fee Structures
Most traditional firms charge success fees, meaning they earn a percentage of your deal value once the transaction closes.
That percentage can range anywhere from 4% to 12% on smaller deals and drop to 1%–3% for larger ones.
However, not all advisors rely on percentage-based commissions.
Some advisory firms offer a fixed-fee M&A advisory structure, which provides:
Transparency — clear pricing without hidden conditions.
Predictability — you know your total cost upfront.
Alignment — fees based on work performed, not just deal value.
This kind of model is becoming increasingly popular among entrepreneurs who want fair and predictable costs rather than variable M&A advisory fee percentages.
The Lehman and Double Lehman Formulas Explained
Two fee frameworks dominate traditional M&A advisory fee agreements:
the Lehman Formula and the Double Lehman Formula.
🔹 Lehman Formula
5% of the first $1M
4% of the second $1M
3% of the third $1M
2% of the fourth $1M
1% of everything above $4M
🔹 Double Lehman Formula
10%, 8%, 6%, 4%, 2% for the same tiers
These formulas are meant to reward advisors as deal size increases, but they can lead to ballooning M&A advisory fees on large transactions.
That’s why many modern firms — especially bizadvisoryboard M&A advisory practices — have moved to fixed-fee or hybrid models that better align with client interests.
Sell-Side vs Buy-Side M&A Advisory Fees
Let’s compare how advisors typically charge depending on which side of the transaction you’re on.
🔸 Sell-Side M&A Advisory Fees
Traditional sell-side M&A advisory fees are usually success-based, averaging:
4%–12% on small deals (under $10M)
2%–5% on mid-market deals
1%–2% on large transactions
These often come with minimum fees of $250K or more.
Some firms, however, use a flat, standard-fee model with no success-based commissions, providing complete cost certainty.
🔸 Buy-Side M&A Advisory Fees
For buyers, fees often include:
Monthly retainers of $5K–$50K
Closing fees of 1%–2% of deal value
Sometimes milestone payments at the LOI stage
Fixed-fee models are also gaining traction on the buy-side, offering upfront clarity and avoiding inflated M&A advisor fees at closing.
Examples: M&A Fees by Deal Size
Let’s look at how M&A advisory fees differ depending on the value of the deal.
| Deal Value | Traditional Success Fee | Fixed-Fee Example | Your Savings |
|---|---|---|---|
| $10M | $600K (6% blended) | $250K | $350K+ |
| $50M | $1.25M (2.5% flat) | $400K | $850K+ |
| $200M | $3M (1.5% flat) | $750K | $2.25M+ |
👉 As you can see, a transparent pricing model helps you save significantly compared to percentage-based M&A advisory fee structures.
Business Broker vs Biz Advisory Board M&A Advisory
When choosing an advisor, it’s important to understand the difference between traditional business brokers and specialized M&A advisory firms.
| Category | Business Broker | M&A Advisory Firm (Recommended) |
|---|---|---|
| Fee Type | Commission-based | Flat retainer + milestone or performance bonuses |
| Total Cost | 8%–12% of sale price | Typically 3%–6% all-in |
| Example (on $1M deal) | $80K–$120K | Around $75K (fixed) |
| Regulatory Compliance | May require broker-dealer license | Structured, fee-based compliance |
| Conflict of Interest | Higher price = higher commission | Focused on client success, not commission |
This comparison shows that M&A advisors typically provide more value and alignment for clients seeking competitive M&A advisory fees.
Key Factors That Affect the Cost of an M&A Advisor
The cost of an M&A advisor depends on several key factors:
1. Deal Size
Smaller deals often carry higher M&A advisory fee percentages, since the same work is spread across a smaller transaction value.
2. Industry
Sectors like tech, healthcare, and financial services demand deeper due diligence, which can affect total M&A fees by deal size.
3. Complexity
Cross-border deals, multi-entity structures, or regulatory challenges typically increase advisory workload — and therefore costs.
4. Timeline
Fast-track deals requiring accelerated timelines may involve premium pricing.
5. Scope of Services
Full-service advisory (valuation, strategy, negotiation, due diligence) usually costs more than limited transaction support.
Understanding these factors helps you evaluate proposals intelligently and ensure you’re paying a fair M&A advisory fee.
Benefits of a Transparent M&A Advisory Fee Structure
Choosing a transparent M&A advisory fee structure provides clear advantages:
✅ 1. Predictability
You know exactly what your advisory costs will be — no surprises.
✅ 2. Cost Control
Flat or hybrid pricing eliminates percentage-based surprises at closing.
✅ 3. Incentive Alignment
The advisor focuses on the quality of the deal, not inflating the price for a higher commission.
✅ 4. Compliance Confidence
A fee-based model ensures adherence to financial regulations without broker-dealer requirements.
✅ 5. Trust and Simplicity
You’ll always know what you’re paying for — and why.
Why M&A Advisory Firms Are Often the Best Choice
M&A advisors are becoming the preferred choice for entrepreneurs and mid-market companies — and for good reason.
Here’s why business owners increasingly recommend advisors:
1. Fair Pricing
They avoid unpredictable six-figure commissions by offering fixed or capped M&A advisory fees.
2. Aligned Incentives
Their success depends on achieving your goals — not on raising the sale price for a higher M&A advisory fee percentage.
3. Professional Expertise
You get investment-bank-level experience without big-bank costs.
4. Comprehensive Support
Beyond the transaction itself, firms help with valuation strategy, operational improvements, and post-deal planning.
5. Transparency
Clients know exactly how much they’ll pay and why — building trust through clarity.
If you’re looking for who offers the most competitive fees for M&A advisory services, start your search with experienced firms that prioritize fixed-fee transparency.
Frequently Asked Questions (FAQs)
1. What does an M&A advisor charge on average?
Typically, M&A advisory fees range from 4% to 12% for smaller deals under $10M, and between 1%–3% for mid- to large-market transactions.
However, many firms now use a flat-fee M&A advisory structure that provides predictable pricing and significant savings.
2. How much does an M&A advisor charge for a $10M deal?
For a $10M deal, the average M&A advisory fee percentage ranges from 5%–6%, or around $500K–$600K.
firms with fixed-fee pricing might charge around $250K, saving you more than $350K.
3. What is included in M&A advisory fees?
M&A advisor fees usually cover:
Business valuation
Deal preparation and marketing materials
Buyer or investor outreach
Negotiation and due diligence management
Closing and transaction support
Some firms also include strategic consulting and post-deal integration planning.
4. What’s the difference between M&A broker fees and M&A advisory fees?
M&A broker fees are commission-based and depend on the transaction price.
M&A advisory fees, especially from firms, tend to be flat or milestone-based, ensuring alignment with your objectives.
5. How do M&A legal fees vary by deal size?
M&A legal fees by deal size typically range as follows:
Under $5M: $25K–$50K
$10M–$50M: $100K–$300K
$100M+: $500K+, depending on complexity
Legal fees are separate from M&A advisory fees but often scale similarly.
6. What is the standard M&A advisory fee structure?
Traditionally, the Lehman Formula is the standard, but more firms are shifting toward fixed or hybrid models that simplify budgeting and reduce conflicts of interest.
7. Who offers the most competitive fees for M&A advisory services?
Typically, smaller advisory firms offer the most competitive M&A advisory fees because they operate with lower overhead and focus on long-term client relationships, not just commission volume.
8. Can you negotiate M&A advisory fees?
Yes. Many advisors are open to customizing an M&A advisory fee agreement based on deal size, readiness, and expected time to close.
9. Do higher M&A fees mean better service?
Not always. Higher M&A advisory fee percentages often reflect firm overhead rather than better outcomes.
The key is finding an advisor with proven experience and transparent pricing.
10. How should I choose an M&A advisor?
Look for:
Transparent fee structure
Strong track record in your industry
References and testimonials
A clear understanding of your business goals
Always ask:
How much does an M&A advisor charge — and how do those fees align with my success?