How to Find an M&A Advisor: 5 Key Questions to Ask Before Partnering With a Firm

After years of building a business from the ground up, the big day finally arrives: a private equity firm or large corporation is knocking at your door, eager to make an acquisition. As quite possibly the most important transaction of your career, it’s a moment that is both exhilarating and terrifying. But no matter how much success you’ve had building your business, selling it is an entirely different beast. With over 70% of acquisition deals estimated to fail, all that hard work can go to waste if the process is not handled correctly. 

Many M&A deals fall apart for a simple reason: founders try to take on the entire M&A process alone. Despite being experts at running their company, founders often lack the specialized experience required to manage a complex sale. An experienced M&A advisor will know exactly how to achieve a successful close, but not every advisor is a good fit for your business. Choosing the right partner means understanding what to look for and knowing which questions to ask. 

What Does an M&A Advisor Do?

An M&A advisor oversees the entire acquisition process, from the earliest stages of planning through to the final closing. Their work often begins months or even years before a deal is on the table. A key part of their role is to help owners develop a sound M&A strategy and establish a defensible valuation for their business. Because a business’s value is subjective and based on factors like market positioning, financial performance, growth prospects, and intellectual property, a great advisor knows how to shape the narrative around these factors to support the best possible offer. 

Once the decision to sell is made, the advisor prepares the necessary marketing materials, such as the confidential information memorandum (CIM), and identifies a curated list of potential buyers. When conversations with an interested party begin, the advisor orchestrates the due diligence process, managing the flow of information and making sure all financial and operational details are presented clearly. They also serve as the lead negotiator to secure the best possible price and terms for the owner. Throughout the final stages, advisors will coordinate with lawyers, accountants, and other parties to manage the details required to get the deal done.

Essential Qualities to Look for in an M&A Advisor

Choosing the right advisor starts with knowing what an ideal partner looks like. While every firm is different, these four traits typically form the foundation of a successful partnership. 

Extensive, Focused M&A Experience

While it’s easy to be impressed by a well-known investment bank, it’s a mistake to assume that a firm’s brand guarantees the skill of the actual people handling your transaction. Even at prestigious firms like Goldman Sachs, fewer than 10% of its employees specialize in investment banking. A dedicated M&A specialist, however, will have a long and successful record of specifically managing business sales from start to finish. This hands-on track record is what gives them the foresight to anticipate challenges and opportunities a generalist might miss.

A Transparent Fee Model 

The way an advisor is paid reveals their underlying motivations. Success-based fees can create pressure to close a deal quickly, even if it’s not the best possible offer. This creates a fundamental conflict: you want the best possible price, while your advisor may be incentivized to get any acceptable deal done quickly, leaving you with nagging doubts and potentially a lower valuation.

A Full-Service, Hands-On Approach

You will often hear promises of a “full-service partnership,” but the definition of that phrase can vary dramatically. A common issue arises when founders fail to clarify who is responsible for the heavy lifting, such as conducting the Quality of Earnings assessment or building financial forecasts. A true partner takes on this intensive preparation and due diligence for you. This frees you up to focus on what you do best: running your business and maintaining its performance throughout the sale.

A Dedicated Team with the Necessary Capacity

Your sale deserves focused attention, which an overcommitted advisor can’t provide. When a lead advisor juggles too many deals, responsiveness suffers and important details can be missed. This is where a collaborative firm structure becomes a significant advantage. A firm with a partnership model can better allocate resources, ensuring your deal gets the attention it requires and you get the benefit of the entire team’s expertise. As a rule of thumb, be wary of any single team managing more than three deals at once.

Overrated M&A Selling Points to Ignore During Your Search

Knowing what qualities to look for is important, but so is recognizing the common sales tactics you’ll encounter during your search. As you vet potential advisors, you will hear two selling points repeatedly: their specialized experience in your industry and an exclusive list of buyer contacts. While these points are designed to sound impressive, they are far less important than they seem. 

• Experience in Your Specific Industry 

A common selling point you’ll hear from investment banks is their specialized experience in your industry. While that sounds compelling, industry knowledge is often less important than mastery of the M&A process. You can see this principle in action at top-tier firms like Morgan Stanley and JP Morgan. Their M&A teams are often industry-agnostic, meaning they aren’t limited to a single sector. They’re structured this way because the ability to sell a company is its own unique skill, one that applies across any industry. In the end, the versatility and adaptability an advisor gains from experience in many different sectors is far more valuable than specialized knowledge of just one.

• A Proprietary List of Buyer Contacts

Another common pitch revolves around an advisor’s exclusive “Rolodex” or special relationships with potential buyers. The reality is that a pre-existing contact list is far less valuable than a comprehensive research process tailored to your specific business. A successful M&A deal relies on identifying the best strategic buyers, not just the most familiar ones. A skilled firm accomplishes this using modern data platforms and methodical outreach, building a curated list of potential acquirers from the ground up. This thorough process will always yield better results than a static list.

5 Questions to Ask Before Hiring an M&A Advisor

You know what to look for, what to avoid, and what to ignore; the next step is to apply that knowledge. Use these five questions to verify a firm’s expertise, approach, and motivations while exposing any potential red flags. 

1. “How Much of Your Work is Focused Specifically on M&A?”

The world of M&A is filled with different types of professionals. Broad terms like “M&A intermediary”, for example, can include not only traditional advisors, but business brokers or general investment bankers. While these professions can be involved in the sale of businesses, their day-to-day work might not be dedicated solely to M&A. A genuine M&A advisor lives and breathes the deal process. By asking this question, you are verifying that the firm is a committed specialist, not a generalist who only occasionally handles transactions. 

Beyond their resume, you can test an advisor’s experience with specific scenarios. A seasoned advisor will have ready answers for questions that get into the details of a deal, such as:

• How would you handle the loss of a large customer during a deal?
• What diligence is needed when rolling over equity?
• How do you negotiate net working capital targets?
• How do you typically structure earn-outs?

You don’t necessarily need a textbook knowledge of these subjects before asking these questions. Instead, your goal is to listen for confidence, detailed responses that show the firm  has handled these types of challenges before. Vague or hesitant answers are a clear red flag. 

2. “Who Exactly Will Be Working On My Deal?”

While you might be impressed by a senior partner in an initial meeting, they are rarely the only person you will work with. It’s important to understand the team’s structure. A good team combines an experienced lead for high-level strategy with diligent junior members who handle the intensive analytical work. Ask to meet everyone involved to get a sense of their collective experience and how they work together. Ideally, you should be looking for a team with at least five years of M&A experience, including time spent on the buyside in roles like private equity or corporate development.

3. “How Hands-on Will Your Team Be?”

While the average deal takes six or more months to complete, the level of support from advisory firms can vary widely. Some provide templates and instructions but leave the heavy work of gathering data and analysis to you. A full-service firm, however, integrates with your company to handle intensive prep work and data analysis on your behalf. This includes taking care of fundamental tasks like:

• Conducting a Quality of Earnings Assessment 
• Assessing KPI trends
• Creating financial forecasts
• Actively negotiating terms

This level of hands-on support is invaluable. Maintaining strong business performance throughout the sale is essential for protecting the deal’s final value.

4. “How is Your Firm Structured?”

A firm’s internal structure can tell you a lot about its culture. Many of the world’s most successful firms, like Goldman Sachs and McKinsey, use a partnership model, meaning the senior advisors are also part-owners of the business. Because they share in the firm’s total profits and not just commissions from their own deals, every partner has a direct financial incentive to collaborate and share resources.

Other firms use an independent contractor model where advisors operate under a larger brand but work for their own bottom line. This can create an “eat-what-you-kill” environment where collaboration is discouraged. When choosing an advisor, you want to ensure everyone is on your team and motivated to see your success, not just the senior partner who is pitching you.

5. “What Fee Model Do You Use?”

The best way to determine whether an advisor will look out for your best interests is through their fee structure. The most common approach is a success-based fee, which is typically a percentage of the final sale price. While that may sound good, it can create an incentive to close a deal quickly, not necessarily for the highest value. Success-fee contracts can also contain hidden terms like “tail periods” or “exclusivity clauses,” which could entitle the firm to a fee for a set period even if you close a deal with someone else later.

The potential downside of success-based fees was famously highlighted in the book Freakonomics. Research showed that real estate agents, who work on a similar commission model, tend to sell their own homes for a higher price than their clients’ homes. They’re willing to wait for a better offer for themselves but are incentivized to have clients close a deal more quickly. This is the same fundamental conflict of interest that can exist in M&A. A better alternative is the more transparent hourly rate model. With this structure, you pay for the time spent on your sale, ensuring the advisor’s focus is always aligned with your best interests instead of a quick close. 

Where to Find Potential M&A Advisors

Knowing the right questions to ask is the most important part of the vetting process, but where do you find qualified advisors to vet in the first place? Here are a few places to start your search:

• Your Professional Network: Your existing professional network is often the best place to start. Ask for recommendations from your corporate lawyer, accountant, wealth manager, or board members. Speaking with other founders who have successfully sold their companies can also provide invaluable, firsthand referrals.
• Industry and Financial Contacts: Your industry network can also be a valuable resource. Reach out to leaders in your industry associations or ask for introductions from your venture capital and private equity contacts. These groups have a constant pulse on the market and can often point you toward advisors with a strong reputation.
• Specialized, Founder-Focused Firms: Finally, consider looking beyond large, traditional investment banks for specialized M&A advisory firms. These boutique firms are often structured to act as true partners for entrepreneurs, providing the senior-level attention and transparent fee models designed to ensure your interests are protected throughout the deal.  

From these sources you can create a shortlist of qualified advisors to begin interviewing. No matter which source you choose, the key is to apply the same rigorous vetting process to every potential candidate. That way, you can find a partner equipped to drive your deal toward a successful close. 

Takeaway 

Selling your business is a high-stakes endeavor, and with a high percentage of M&A deals failing, the process requires specialized expertise. An M&A advisor’s role is to manage every stage of a sale, from initial strategy and valuation through to the final closing. 

The most effective advisors have a verifiable track record of successful deals, a hands-on process, a collaborative team, and a transparent fee structure. To identify a suitable firm, it’s essential to ask direct questions that test their expertise while ignoring misleading sales pitches about industry focus or proprietary buyer lists. Once you know what to look for, your search for qualified candidates can begin with your professional network, industry contacts, or specialized advisory firms.

M&A Advisor Frequently Asked Questions (FAQs)

• What Does An M&A Advisor Charge? 

M&A advisor fees vary but typically follow one of two structures. The most common is a success-based model, where the fee is a percentage of the final sale price. The other is an hourly-rate model, where you pay for the time the firm dedicates to your sale. With either structure, it’s important to understand the full terms, including potential hidden costs or clauses like “tail periods” in success-fee agreements.

• When Should I Hire An M&A Advisor?

 It’s best to engage an M&A advisor long before you plan to sell, sometimes 12 to 24 months in advance. An advisor’s most valuable work is often done upfront, helping you prepare your financials, develop a solid M&A strategy, and position the business to maximize its value when the time is right. Waiting until a buyer has already approached you can limit your options and negotiating leverage.

• What’s The Difference Between An M&A Advisor and A Business Broker?

 While the terms are sometimes used interchangeably, the difference lies primarily in focus and scale. A business broker typically handles the sale of smaller businesses, often to individual buyers. An M&A advisor specializes in more involved deals, usually with private equity firms, corporations, or other institutional buyers. Advisors tend to also be more strategic, utilizing in-depth financial analysis to maximize the deal’s value and structure favorable terms.