How are M&A advisors paid?
Firmex, a data-room company, surveyed 456 middle-market M&A professionals in December 2024 and January 2025, half of them in North America 1. The most common work-fee structure was a monthly fee, used by 30% of firms, just ahead of a fixed retainer at 28%. In North America, 19% of firms said they charge no work fee at all 1.
One arrangement the survey describes is a monthly work fee of $5,000 to $10,000, deducted from any success fee 1.
How big is the success fee?
The success fee is paid when the deal closes, and it scales with the size of the deal. In the same survey, average success fees were 4.8% for a $5 million deal, 3.4% for a $20 million deal and 2.0% for a $100 million deal 1.
On a $5 million sale, 4.8% is $240,000, paid only if the deal closes.
What is the Lehman formula?
The Lehman formula is a sliding scale for the success fee. In its classic version it's 5% for the first $1 million, 4% for the second million, and so on 1. The survey found it in use at 41% of firms, and many said they use a "Double Lehman", which starts at 10% and falls to 2% 1.
Why does it matter how an advisor is paid?
An advisor paid at closing is paid for an outcome, and has a reason to want this deal to close. An advisor paid for the work doesn't.
How an intermediary is paid also matters to securities regulators. The SEC's guide to broker-dealer registration asks whether compensation depends on, or is related to, the outcome or size of a transaction, and says a yes may mean the person needs to register as a broker 2. The SEC has also noted that courts have treated transaction-based compensation as a factor indicating that broker registration may be required 3.
What does Saltaire Partners charge?
Each module has its own fixed fee, agreed in writing before work starts, with half paid up front. A range of value opinion is $1,000, a confidential information memorandum is $4,000, and an offer evaluation is $500 per offer. Larger engagements are scoped after the intro call, then fixed in writing the same way.
There's no success fee and no exclusive. What you pay doesn't depend on whether the business sells, or for how much.
This is general information, not tax or legal advice. Your attorney and CPA should confirm how it applies to your sale.
