Business Broker vs. M&A Advisor vs. Investment Bank: Who Should You Hire to Sell Your Business?
Three tiers of professionals sell businesses. Picking the wrong one can cost you hundreds of thousands in price or blow up your process entirely.
The Quick Comparison
Business Broker
M&A Advisor
Investment Bank
Rule of thumb: if your business is worth $1M+, you should be talking to an M&A advisor, not a broker. If you are under $2M in value, you can go either way, but the process matters more than the label.
Business Brokers: What They Actually Do
A business broker is a licensed professional (in most states) whose job is to list your business for sale and connect you with individual buyers. Think of them as real estate agents for small businesses. Most brokers work on transactions under $2M in purchase price.
Day-to-day
- Write a listing with revenue, SDE, asking price
- Post it on MLS-style business-for-sale marketplaces
- Field inbound inquiries from individual buyers
- Send out an NDA-gated information packet
- Schedule buyer-seller meetings
- Walk the deal through a standard purchase agreement
How they get paid
Typically 10 to 12 percent of the purchase price, paid at closing. Some brokers charge small upfront marketing fees. Most operate on standard listing agreements that auto-renew.
Who should hire one
Sellers with businesses under $1M in purchase price, or Main Street businesses (restaurants, laundromats, convenience stores) where retail buyers dominate the pool.
M&A Advisors: The Middle Market Specialist
An M&A advisor works on businesses in the $1M to $50M enterprise value range. They run process-driven engagements that feel more like an institutional sale than a listing. Instead of waiting for buyers to find you, they go find buyers for you.
Day-to-day
- Prepare blind teaser and 20-40 page CIM (Confidential Information Memorandum)
- Build a targeted list of 100-500 potential strategic and financial buyers
- Conduct outbound outreach under mutual NDA
- Manage a competitive bidding process to create price tension
- Negotiate the LOI, working capital peg, escrow, and indemnities
- Project-manage due diligence between seller, buyer, QoE, legal, and lender
- Quarterback the purchase agreement with both sides' attorneys
How they get paid
Success fees in the 1 to 10 percent range depending on deal size. Smaller deals (under $2M) pay closer to 10 percent; larger deals ($10M+) trend toward 1-4 percent. Some advisors charge a modest retainer or monthly work fee. The best modern M&A platforms, BridgeBook included, charge zero upfront and only earn the fee at closing.
Who should hire one
Owners of businesses worth $1M to $50M who want a confidential, competitive process with access to strategic and private equity buyers, not just retail buyers browsing listing sites.
Investment Banks: The Upper Middle Market
Investment banks typically engage on deals $25M and up. They run full auction processes with institutional buyers, large private equity funds, family offices with dedicated M&A teams, and publicly traded strategic acquirers. They are also registered broker-dealers, which matters in regulated industries.
Day-to-day
- Produce a full confidential information memorandum with detailed financial projections
- Run a staged auction with structured bid deadlines
- Manage a much larger data room with multiple buyer workstreams in parallel
- Handle fairness opinions, regulatory approvals, and complex deal structures
- Coordinate with accounting firms, legal, and financing partners
How they get paid
Monthly retainers of $10K-$50K plus a 1 to 3 percent success fee on a tiered basis (with "Lehman formula" variants still common). Retainers are usually credited against success fees. Minimum engagement sizes are often $20M+.
Who should hire one
Businesses worth $25M or more, or any deal that requires a registered broker-dealer due to regulatory constraints (securities issuance, regulated industries, cross-border elements).
When to Switch Tiers
- Outgrown a broker, You are getting low-quality inquiries, your broker has no relationships with PE firms or strategics, and your business is over $1M in value. Move up to an M&A advisor.
- Outgrown an M&A advisor, Your deal is $25M+, you are in a regulated industry, or you need a formal auction with 50+ institutional buyers. Move up to an investment bank.
- Downshift from an investment bank, Your banker is not prioritizing your file because it is small relative to their other mandates. Switch to an M&A advisor who will focus on your deal.
Common Traps to Avoid
- Discount brokers charging "flat fee" to list, You get a listing and nothing else. No negotiation, no buyer vetting, no deal management. The low fee costs you the deal.
- Dual agency, Same broker represents both sides and collects fees from both. Walk away immediately.
- Unlimited-term listing agreements, A 24-month exclusive with no out-clauses traps you if the broker is underperforming. Negotiate a 6-12 month initial term with clear termination rights.
- Large upfront retainers without credit, If an advisor wants a $25K+ retainer that is not credited against the success fee, ask why. Good advisors are confident enough to earn their fee at closing.
- No proof of past deal experience, Ask for a list of 5-10 deals closed in the last 24 months in your revenue range. If they can't produce one, keep looking.
- "We have a buyer ready right now", Classic pressure tactic. A real advisor runs a competitive process, they don't pre-match you to one buyer they happen to know.
Where BridgeBook Fits
BridgeBook operates at the M&A advisor tier for deals $750K to $50M, but with one key difference: we combine a curated advisory process with a verified-buyer marketplace. That means you get the confidentiality and process quality of a traditional advisor plus the buyer reach of a marketplace, without the public listing risk of either.
- No upfront fees, we only get paid when you close
- 1-10% commission depending on deal size
- Verified, vetted buyer pool with proof of funds required
- Blind teasers, your name never appears publicly
- Full process management from teaser to wire transfer
- $750K minimum deal size keeps the buyer pool serious
Curious what this looks like in practice for your industry? See our Amazon FBA exit guide, our dental practice sale guide, or our SaaS exit guide.
Frequently Asked Questions
What is the difference between a business broker and an M&A advisor?
A business broker typically handles transactional sales under $2M in purchase price, often listing on MLS-style public marketplaces and working with individual retail buyers. An M&A advisor runs a curated process for businesses between $1M and $50M, reaches out directly to strategic buyers and private equity firms, and uses confidential blind teasers instead of public listings. M&A advisors are process-driven rather than listing-driven, and their fees are typically in the 1-10 percent range depending on deal size.
When should I hire an investment bank instead of an M&A advisor?
Investment banks make sense once your business is $25M+ in enterprise value, or if you are in a regulated industry that requires a registered broker-dealer to handle the transaction. They run full competitive auctions, typically charge a retainer plus 1-3 percent success fee on a tiered basis, and focus on institutional buyers. Under $25M, an M&A advisor usually gets you similar outcomes at a lower total cost.
What is a dual agency and why is it a trap?
Dual agency is when the same broker represents both the seller and the buyer in a transaction and collects commissions from both sides. It creates an obvious conflict of interest: the broker cannot negotiate aggressively for either party. Reputable M&A advisors refuse dual agency. If a broker offers to represent both sides, walk away.
How much do M&A advisors typically charge?
Fees are typically 1 to 10 percent depending on deal size, almost always structured as a success fee paid at closing. Smaller deals pay higher percentages because the absolute work is similar regardless of deal size. Some advisors also charge a small upfront retainer or a monthly work fee that is credited against the success fee. BridgeBook charges no upfront fees, only a success fee at closing.
Can I sell my business myself without hiring anyone?
You can, and some owners do. But the risks are significant: confidentiality leaks, unqualified buyers, negotiating against professional buyers who do this every day, and emotional decision-making when offers land. Most owners who try to sell themselves either leave money on the table or spend so much time on the process that the business suffers. A good advisor pays for themselves by getting a higher price and a better structure.
Not Sure Who You Should Hire?
Start with a free valuation. Then hop on a call with an advisor and we'll tell you straight whether you need us, a broker, or an investment bank.