Business Broker vs Investment Banker: When to Use Which (2026)

“Should I hire a business broker or an investment banker?” is a question owners ask in the wrong frame. It assumes those are the two options. They’re not. There are at least four advisor models — broker, M&A advisor, investment banker, and buy-side partner — each with different deal-size fits, fee structures, and process types. Hiring the wrong model for your deal is one of the most expensive structural mistakes owners make.

This article compares all four models honestly. We’ll cover deal size fit, fee structures, process style, timeline, who fits which, and the trade-offs of each. We’ll be honest about when a broker is the right answer (sub-$1M EBITDA retail/restaurant/local), when an M&A advisor fits (LMM with broker-network value), when an investment banker is necessary (sophisticated structures, $10M+), and when a buy-side partner shortcuts the whole thing.

The right model depends on your deal size, your industry, and what you actually want from the process.

Disclosure: CT Acquisitions is a buy-side partner. We have an obvious bias toward our own model. We’re going to argue that for $1M+ EBITDA businesses in industries with known buyer pools (manufacturing, distribution, HVAC, plumbing, electrical, home services, healthcare services, business services), a buy-side partner is often a better fit than either a broker or an investment banker. We’re also going to be specific about when we’re not the right answer.

One important framing. These models exist on a spectrum, not as discrete categories. Some firms call themselves ‘M&A advisors’ but operate like Main Street brokers. Some boutique investment banks compete directly with LMM advisors at the lower end of their range. The label matters less than the actual process and fee structure. The questions in this article apply across labels — what the firm actually does for your deal is what matters.

“The honest answer to ‘broker or banker?’ is usually ‘neither, until you’ve checked whether a buy-side partner can introduce you directly to the 4-7 buyers who would actually compete for your business — for free.’”

Key Takeaways

• Four advisor models: business broker, M&A advisor, investment banker, buy-side partner.
• Deal size fit: broker (sub-$1M EBITDA), M&A advisor ($1-10M), investment banker ($10M+), buy-side partner ($1M+ in known-buyer industries).
• Fee structures vary widely: 1% for IB on $50M deal vs. 12% for Main Street broker on $500K deal.
• Process style: brokers list, M&A advisors auction with relationships, investment bankers run sophisticated processes, buy-side partners intro directly.
• Timeline: broker (9-18 months), M&A advisor (6-12), investment banker (4-9), buy-side intro (60-120 days).
• The right model depends on deal size, industry buyer-pool knowability, structural complexity, and owner preference for full process management vs. direct intros.

The four advisor models compared at a glance

Before going deep on each model, here’s the structural overview. Four models, each with a fit, a process, a fee structure, and a typical timeline. The comparison table is the fastest way to orient before reading the deeper analysis below.

What the comparison reveals. There’s no single ‘best advisor.’ There’s only the right advisor for your specific deal — defined by your deal size, your industry, your structural needs, and your preference for full process management vs. direct intros. Owners who interview only one model (typically a broker, because brokers have larger marketing budgets) often end up with a sub-optimal fit.

Business broker: Main Street model

Business brokers handle Main Street businesses — typically sub-$1M EBITDA. Many are franchise-based (Murphy, Sunbelt, Transworld, VR). Others are independent. Their core process is listing-driven: your business goes on BizBuySell, BusinessesForSale, and similar platforms. Buyers come through the listing inquiries.

Who buys through brokers. Local entrepreneurs and first-time owners. SBA-financed buyers. Career-changers leaving corporate jobs. Occasional regional investors. Sometimes franchise expansion candidates. The pool is broad but generally lower-resourced than LMM PE or strategic acquirers. Multiple bidders are common but the bid range is typically tighter than auction-style LMM processes.

Fee structure. 10-12% of sale price is standard. $25-100K upfront retainer or listing fee. Some brokers charge monthly fees ($2-10K/month) on top. Tail provisions of 12-24 months. Expenses (marketing, listing, sometimes business valuation) often charged separately. On a $750K sale at 12%, total broker compensation is approximately $90K plus retainers.

Best for. Retail, restaurant, salons, gyms, auto repair, dry cleaners, and other local-service businesses where the buyer pool is mostly individual. Sub-$1M EBITDA businesses where the buyer pool is genuinely unknown and broad listing exposure is needed. Owners who want full process management and don’t want to participate in any buyer interactions directly.

When a broker is the wrong fit. $1M+ EBITDA in industries with known PE/strategic buyer pools (manufacturing, distribution, home services, healthcare, business services) — brokers don’t typically have the deep relationships in those buyer pools. Sophisticated structures (rollover equity, ESOPs, complex earnouts). Sellers who want competitive auction dynamics with multiple PE/strategic bidders.

M&A advisor: lower middle market boutique

M&A advisors are the lower middle market middle ground. Independent firms or regional boutiques (Cogent, Generational Equity, Sun Mergers, IBG, plus dozens of others — the field is fragmented). They handle $1-10M EBITDA deals where the buyer pool is mostly PE platforms, family offices, search funders, and strategic acquirers.

How they work. Relationship-driven outreach. The advisor has a rolodex of PE firms, family offices, and strategics in their target industries. They write a confidential information memorandum (CIM), build a buyer list of 30-100 candidates, and run a structured outreach process. NDAs, IOIs (indications of interest), management presentations, LOIs.

Fee structure. 6-10% of sale price standard. Often Lehman scale (5/4/3/2/1) or modified Lehman (10/8/6/4/2). $25-100K monthly retainers (sometimes credited against success fee). 12-month exclusivity typical. 18-month tail typical. Expenses ($25-100K) often charged separately. On a $5M sale at modified Lehman, total advisor compensation is approximately $300K plus retainers.

Best for. $1-10M EBITDA businesses in fragmented industries with broad PE roll-up dynamics. Owners who want a competitive auction with multiple bidders. Owners who don’t have direct relationships with PE firms or strategic acquirers in their industry. Businesses with structural complications (customer concentration, owner dependency, financial reporting gaps) that benefit from full-time advisory.

When an M&A advisor is the wrong fit. Deal size below $1M EBITDA (Main Street broker is typically a better fit). Deal size above $10M EBITDA (investment banker brings better resources). Industries with very narrow buyer pools (3-7 known acquirers) where direct outreach via buy-side partner is faster. Owners who don’t want 9-12 month exclusivity.

The variance among M&A advisors is enormous. Some have deep, current relationships with the 30-50 PE firms most active in their industry. Others have a CRM list of 500 firms they email blast, hoping someone responds. The 7 vetting questions in our broker article apply: which deals have you closed at my size in the last 24 months, which specific buyers will you contact, what’s your fee structure, what’s your exclusivity, who actually does the work.

Investment banker: middle and upper middle market

Investment bankers handle the middle and upper middle market — typically $10M+ EBITDA. At the boutique end (Houlihan Lokey’s LMM group, William Blair, Lincoln International, Harris Williams, Robert W. Baird, Piper Sandler at the lower end of their ranges; smaller boutiques in the $10-50M range). At the bulge bracket (Goldman, Morgan Stanley, JPMorgan) for $100M+ deals, though they rarely engage at lower ranges.

How they work. Process-driven sophisticated auctions. Sell-side QoE built into the process. Sophisticated CIM with multiple operating scenarios, market analyses, and management projections. Multi-round bid processes with structured timelines. Sophisticated diligence support. Complex deal structures (rollover equity, earnouts, recaps, partial sales). Investment banker reps are typically senior bankers with 10-25+ years of experience.

Fee structure. 1-3% of sale price on $20M+ deals. 3-5% on $10-20M. $100-200K+ monthly retainers. 12-18 month exclusivity. Reimbursement of substantial expenses (CIM, virtual data room, travel, market research). On a $50M sale at 2%, total IB compensation is approximately $1M plus retainers. On a $20M sale at 3%, approximately $600K plus retainers.

Best for. $10M+ EBITDA businesses with sophisticated structures or competitive auction dynamics. Owners who need rollover equity, ESOPs, recapitalizations, or complex earnouts engineered. Industries where 30-100 credible bidders need to be managed (multi-PE, multi-strategic, family offices, sovereigns). Cross-border deals. Public company spin-outs. Highly regulated industries (healthcare, financial services, energy).

When an investment banker is the wrong fit. Deal size below $10M EBITDA — the fees consume too much value, the process is too elaborate, and the buyer pool isn’t deep enough to justify the auction sophistication. Owners who want speed (4-9 months is fast for IB but slow vs. buy-side direct intros). Industries with narrow buyer pools where the IB’s broad outreach doesn’t add value beyond direct relationship intros.

Buy-side partner: the alternative model

Buy-side partners work for the buyers, not the sellers. Firms like CT Acquisitions are paid by the buyers when a deal closes. The seller pays nothing — no retainer, no success fee, no exclusivity, no 12-month contract, no tail provision. The model is structurally different from broker / M&A advisor / investment banker.

How buy-side partners work. We have direct, ongoing relationships with 76+ active LMM buyers — search funders, family offices, lower middle-market PE, strategic consolidators. Including direct mandates with the largest consolidators in home services that other intermediaries can’t access. When a seller comes to us, we identify the 4-7 specific buyers we already know who fit their business based on industry, size, growth profile, and seller goals. We make introductions. The seller chooses whether to take any of those calls.

Fee structure. Buyers pay us a fee when a deal closes — typically 1-3% of transaction value, paid by the buyer. The seller pays $0. No retainer, no exclusivity, no contract. The seller can take our intros and walk away after 30 minutes, or take 1-2 calls and decide to engage a broker instead, or move forward with a direct deal. There’s no hook.

Best for. $1M+ EBITDA businesses in industries with known buyer pools — manufacturing, distribution, HVAC, plumbing, electrical, home services, healthcare services, business services, pest control, and the many other fragmented LMM verticals where 30-100 specific acquirers are knowable in advance. Owners who want to learn what their business is worth in today’s market without committing to a 9-12 month exclusive engagement. Owners who are 12-24 months from selling and want to start relationships early.

When a buy-side partner is the wrong fit. Sub-$1M EBITDA where the buyer pool is mostly individuals (Main Street broker is the right fit). Industries where the buyer pool is genuinely unknown and broad outreach is needed (LMM advisor adds value). Sophisticated structures requiring investment-grade financial engineering ($10M+ may need IB resources). Owners who want full process management and don’t want to participate in any buyer interactions personally.

Trade-offs. We don’t run a multi-buyer auction. We introduce specific buyers we already know. That can produce a faster, cheaper deal — but it doesn’t produce the maximum-bid auction dynamic that an LMM advisor or investment banker would engineer. For sellers who prioritize speed and structural fit over maximum auction-driven bid, the buy-side path is typically a better fit. For sellers who specifically want auction dynamics, an LMM advisor is the better tool.

Decision framework: which model fits your deal?

The decision rests on five factors. Deal size, industry buyer-pool knowability, structural complexity, owner preference for full process management vs. direct intros, and timeline urgency. Run each factor honestly and the right advisor model becomes clearer.

Deal size. Under $1M EBITDA: Main Street broker is the typical fit. $1-10M: M&A advisor or buy-side partner. $10M+: investment banker or sophisticated M&A advisor (with potential buy-side partner overlap for the lower end of this range).

Industry buyer-pool knowability. If your industry has 50+ active PE roll-ups and 5-10 strategic consolidators with known M&A appetite (manufacturing, HVAC, plumbing, electrical, distribution, home services, healthcare, pest control, business services), the buyer pool is knowable. A buy-side partner can typically identify 4-7 specific fits in a 30-minute call. If your industry has unclear buyer dynamics (some specialty manufacturing, regulated services, novel business models), broader outreach via LMM advisor or investment banker may be needed.

Structural complexity. Simple structures (clean asset sale, all-cash deal, single buyer): broker or buy-side partner sufficient. Moderate complexity (earnouts, seller financing, partial rollover): LMM advisor or buy-side partner with attorney support. High complexity (recapitalizations, ESOPs, multi-step structures, regulatory complexity, cross-border): investment banker or sophisticated LMM advisor.

Owner preference. Full process management (broker handles everything, owner stays out of buyer interactions): broker, LMM advisor, or investment banker. Direct intros and active owner participation: buy-side partner. Hybrid (advisor handles process but owner takes direct meetings with buyers): typically LMM advisor or investment banker structured around the owner’s preference.

Timeline urgency. 9+ months acceptable: broker, LMM advisor, or investment banker. Need to close in 60-120 days: buy-side partner with pre-existing buyer relationships. Need to start exploring without committing: buy-side partner intros (no contract, no exclusivity).

Worked examples: 4 owner profiles, 4 different recommendations

Example 1: $400K EBITDA family-owned diner in suburban Ohio. Sub-$1M EBITDA. Buyer pool is local entrepreneurs and SBA-financed individual buyers. No PE roll-up dynamic. Recommendation: Main Street broker. Local broker with 5+ years of restaurant experience can run a 9-12 month listing process and find a qualified individual buyer. Buy-side partners and investment bankers are not the right fit; the buyer pool isn’t there. Expected fees: $40-60K total broker compensation.

Example 2: $3M EBITDA HVAC company in suburban Atlanta. $3M EBITDA. Industry is in active PE roll-up (36% of LMM buyers active in HVAC as of 2026). Buyer pool is knowable: PE platforms, strategic consolidators, family offices. Recommendation: buy-side partner intro first (likely 4-7 specific PE platform fits in our 76+ buyer network), or LMM advisor if the owner wants full auction dynamics. The buy-side path is typically 60-120 days from intro to close at no fee to the seller. The LMM advisor path is typically 6-9 months at 6-8% fees ($180K-$240K) but produces a competitive multi-bid auction. The right answer depends on the owner’s preference for speed vs. auction maximization.

Example 3: $15M EBITDA specialty manufacturing company in the Midwest. $15M EBITDA puts this at the LMM/middle-market boundary. Sophisticated buyers (mid-market PE, strategic consolidators, possibly cross-border interest). Owner wants rollover equity (will take a second-bite return on a recapitalization). Recommendation: investment banker (or top-tier LMM advisor with sophisticated process capability). The deal needs structured auction, sophisticated financial modeling, rollover equity engineering, and substantial diligence support. Expected IB fees: $300K-$500K plus retainers. Expected timeline: 5-8 months.

Example 4: $40M EBITDA software business with cross-border buyer interest. $40M EBITDA. Sophisticated structures likely (potential strategic + sovereign buyers, cross-border tax considerations, potential public-market exit alternative). Recommendation: bulge bracket or top-tier boutique investment banker. The deal complexity, buyer sophistication, and structural alternatives justify the investment banker’s resources and fees ($800K-$1.5M+ plus retainers). The timeline is typically 6-9 months. Buy-side partners and standard LMM advisors don’t have the resources for this scale of complexity.

Common mistakes when choosing an advisor

Mistake 1: hiring the first advisor you meet. Most owners hire the first broker or advisor they meet. The variance among advisors in transaction skill, buyer access, and fee structure is enormous — often $200K-$1M of net-proceeds difference on the same deal. Interview 5-7 candidates across at least 2 models (e.g., 3 LMM advisors and 3 buy-side partners, or 2 brokers and 3 M&A advisors).

Mistake 2: defaulting to the most familiar model. Most owners default to broker because brokers have the largest marketing presence. Some default to investment banker because they associate it with prestige. Neither default is right for every deal. Run the decision framework above honestly.

Mistake 3: treating the labels as interchangeable. ‘Broker,’ ‘M&A advisor,’ ‘intermediary,’ ‘business banker,’ ‘deal advisor’ — these are loose labels. What matters is the firm’s actual process: what fees, what exclusivity, what buyer access, what timeline, what level of process management. Two firms with the same label can operate completely differently.

Mistake 4: signing a 12-month exclusive engagement before exploring alternatives. Once you sign exclusivity, you’re locked in. Buy-side partner intros, direct outreach to known buyers, and other paths are precluded for the duration. Before signing, talk to a buy-side partner (it’s free, no contract) to understand whether your specific deal can be done faster and cheaper through direct intros. If yes, take that path. If no, then sign with the broker or advisor.

Mistake 5: focusing on fees without focusing on outcomes. A 1% IB fee on a $50M deal is $500K. A 12% Main Street broker fee on a $500K deal is $60K. The dollar amounts mismatch the deal sizes — that’s expected. What matters is net proceeds: does the advisor model produce a higher net price (gross price minus fees minus tax) than the alternatives? On a $5M deal, an LMM advisor at 8% may produce a $5M sale ($4.6M net of fees) where a buy-side partner at $0 may produce a $4.7M sale ($4.7M net). The buy-side partner wins on net even with a lower gross. Run the math.

Fee structures compared across all four models

The fee structure differences across the four models go beyond simple percentage comparisons. Each model has a different combination of retainer, success fee, exclusivity, tail provision, and expense reimbursement. Owners who compare only the headline percentage miss the structural variance — which on a typical $5M deal can be $300-500K of total cost difference.

Main Street broker fee structure. 10-12% of sale price success fee. $25-100K upfront retainer. Sometimes $2-10K monthly retainer. 12-month exclusivity typical. 18-24 month tail provision. Expenses ($10-30K) often charged separately. On a $750K business sale: total broker compensation typically $90-150K.

LMM advisor fee structure. 6-10% of sale price success fee, often Lehman scale (5/4/3/2/1 standard or 10/8/6/4/2 modified). $25-100K upfront retainer. $5-25K monthly retainer common. 12-month exclusivity standard. 18-month tail. Expenses ($25-100K) often charged separately. On a $5M sale: total LMM advisor compensation typically $250-400K, sometimes higher.

Investment banker fee structure. 1-3% on $20M+ deals; 3-5% on $10-20M. $100-200K+ upfront retainer. $10-50K monthly retainer. 12-18 month exclusivity. 18-month tail. Substantial expenses ($100-200K+ on sophisticated processes). On a $50M sale at 2%: total IB compensation typically $1-1.5M.

Buy-side partner fee structure. $0 to seller. The buyer pays the buy-side partner a fee at closing — typically 1-3% of transaction value. The seller pays no retainer, no success fee, no expenses, no tail provision. No exclusivity, no contract until a buyer is at the closing table. The trade-off: no multi-buyer auction; the buy-side partner introduces specific buyers from their existing relationships.

What this means for net proceeds. On a $5M sale, net to seller is approximately: Main Street broker $4.35M, LMM advisor $4.6M, investment banker $4.4M (at this size, IB doesn’t typically engage), buy-side partner $5M (at the same gross sale price). The buy-side path produces the highest net — but only if the gross sale price is comparable. Where multi-buyer auction adds enough premium to outweigh the fee, the LMM advisor wins. Where buyer pool is knowable in advance, the buy-side path wins.

Industry fit: which model works best for which sectors

The right advisor model depends on industry as much as on deal size. Some industries have deep, fragmented buyer pools where multi-buyer auctions produce substantial premium. Others have narrow, knowable buyer pools where direct intros are faster and produce equivalent gross prices.

Fragmented industries with deep buyer pools (LMM advisor or investment banker fits well). Manufacturing (50% of LMM buyers active — deep, fragmented). Distribution (34%). Business services (25%). Healthcare services (16%). Specialty industrial services (20%). In these industries, a competitive auction across 30-50 potential bidders typically produces 10-20% gross uplift over direct-intro outcomes — justifying $300-500K of advisor fees.

Industries with narrow but active buyer pools (buy-side partner fits well). HVAC (36% active but concentrated in 10-15 specific consolidators). Plumbing (29% similarly). Electrical (40%). Pest control (12% but consolidating). Specialty manufacturing (varies). Roofing services. In these industries, the buyer pool is knowable in advance — a buy-side partner can identify the 4-7 specific fits in a 30-minute call. Multi-buyer auction adds little premium because the pool is the pool.

Industries with thin buyer pools (Main Street broker or wait). Restaurants, retail, automotive services, fitness, construction services, some consumer-discretionary. Buyer pools are mostly individual entrepreneurs and SBA-financed buyers. Main Street broker is the typical fit, with longer process and tighter multiples. Sometimes the right answer is to wait for industry consolidation to develop more institutional buyer interest.

Cross-border or sophisticated structure deals (investment banker only). Cross-border M&A. Public company spin-outs. Highly regulated industries (healthcare consolidations with FDA implications, financial services with regulatory approvals, energy with environmental complexity). These deals require investment-grade financial engineering and process management that LMM advisors and buy-side partners typically don’t have.

Recommended starting point by industry profile. If you’re in HVAC, plumbing, electrical, roofing, distribution, healthcare services, business services, pest control, manufacturing under $10M EBITDA — start with a buy-side partner conversation (free, no contract). If you’re in restaurants, retail, fitness, automotive services with sub-$1M EBITDA — Main Street broker is the typical fit. If you’re in fragmented industries with $10M+ EBITDA — LMM advisor or investment banker for sophisticated process. If you have cross-border or regulatory complexity — investment banker.

Combining models: when sequential or parallel engagement makes sense

The advisor decision isn’t always single-model. In some cases, sequential or parallel engagement of multiple models produces better outcomes than choosing one. Common patterns below.

Pattern 1: buy-side partner first, then LMM advisor if needed. Start with buy-side partner intros (free, no contract). If the intros produce 1-2 strong LOIs at acceptable price, take the deal. If the intros don’t produce sufficient interest or the bid range is below expectations, engage an LMM advisor for a broader auction. The buy-side phase costs nothing and informs whether broader marketing is worth the 9-12 month commitment.

Pattern 2: pre-process fractional CFO, then advisor. Hire a transaction-focused fractional CFO 6-12 months before going to market to clean up financials, build the data room, run sell-side QoE, and prep the buyer list. Then engage an LMM advisor or buy-side partner for the marketing phase. The CFO costs $50-150K but typically uplifts the multiple by 0.5-1x EBITDA, so the ROI is strong.

Pattern 3: investment banker for sophisticated structuring + LMM advisor for relationship outreach. On larger deals with structural complexity, sometimes the investment banker leads the structure and the LMM advisor co-runs the outreach to capture broader buyer pools. Less common but works when the IB is process-strong but relationship-thin in your specific industry.

Pattern 4: direct outreach + attorney for known-buyer deals. If you already know the 1-3 buyers most likely to acquire you (a competitor that’s expressed interest, a customer that’s a strategic fit, an employee buyer), direct outreach with attorney support may be the lowest-cost, fastest path. The attorney handles LOI and definitive agreement; you handle relationships. Costs: $50-150K legal fees vs. $300K-$1M advisor fees.

Conclusion

“Business broker vs investment banker” is a question framed too narrowly. There are at least four advisor models — business broker, M&A advisor, investment banker, buy-side partner — and each fits different deal sizes, industries, structural needs, and owner preferences. The right model for your deal is determined by deal size (sub-$1M favors broker, $1-10M favors M&A advisor or buy-side partner, $10M+ favors investment banker), industry buyer-pool knowability (known pools favor buy-side partner; unknown favor broader outreach via M&A advisor), structural complexity (complex structures favor investment bankers), owner preference (full process management favors brokers/advisors; direct intros favor buy-side partners), and timeline (urgency favors buy-side partner). The most expensive mistake is defaulting to one model without comparing alternatives. Interview 5-7 candidates across at least 2 models. Run the decision framework honestly. And if you want to talk to someone who knows the buyers personally instead of running an auction, we’re a buy-side partner — the buyers pay us, not you, no contract required.

Frequently Asked Questions

What’s the difference between a business broker and an investment banker?

Deal size and process sophistication. Business brokers typically handle sub-$1M EBITDA businesses through listing-driven processes with local/individual buyers. Investment bankers typically handle $10M+ EBITDA with sophisticated multi-buyer auctions, complex structures, and process-driven engagement. Fees: brokers charge 10-12% plus retainers; bankers charge 1-3% on large deals plus large retainers. Timeline: brokers 9-18 months; bankers 4-9 months. Brokers fit Main Street, restaurants, and local services. Bankers fit middle-market deals with sophisticated structures.

Where does an M&A advisor fit between broker and investment banker?

M&A advisors handle the lower middle market — typically $1-10M EBITDA. They’re relationship-driven (not listing-driven like brokers) but lighter-touch than investment bankers. They have networks of PE firms, family offices, search funders, and strategic acquirers in their target industries. Fees: 6-10% of sale price (often Lehman scale) plus $25-100K retainers. Timeline: 6-12 months. Fit: $1-10M EBITDA in fragmented industries with PE roll-up dynamics.

Do I need a business broker or can I sell directly?

Direct sales work for owners who already know their likely buyer (a competitor that’s expressed interest, a customer that’s a strategic fit, an employee buyer). They also work for owners with prior M&A experience. Brokers add value when the buyer pool is unknown and broad outreach is needed — typical of sub-$1M EBITDA, retail, restaurant, and local service businesses. For $1M+ EBITDA in industries with known buyer pools, a buy-side partner can often produce a faster, cheaper deal than either a broker or direct outreach.

What size deal does an investment banker handle?

Boutique investment banks typically handle $10M+ EBITDA. The lower end of the boutique IB range overlaps with the upper end of M&A advisors. Bulge bracket banks (Goldman, Morgan Stanley, JPMorgan) typically engage at $100M+ EBITDA. Below $10M EBITDA, IB fees consume too much value and the deal complexity doesn’t justify their resources. M&A advisors and brokers are typically better fits below $10M.

How much does each type of advisor cost?

Business broker: 10-12% of sale price + $25-100K retainer. M&A advisor: 6-10% (or Lehman scale 5/4/3/2/1, or modified Lehman 10/8/6/4/2) + $25-100K retainer. Investment banker: 1-3% on large deals + $100-200K+ retainer. Buy-side partner: $0 to seller (buyer pays). On a $5M deal, expect: broker $500-650K, M&A advisor $300-400K, IB $150-300K (rare at this size), buy-side partner $0.

What is a Lehman scale fee?

A tiered success-fee structure originally formalized by Lehman Brothers. Standard Lehman: 5% on first $1M, 4% on next $1M, 3% on next $1M, 2% on next $1M, 1% on everything above. Modern variants (modified Lehman, double Lehman) flip the curve to weight more toward smaller deals: 10/8/6/4/2. On a $5M deal, standard Lehman = $150K; modified Lehman = $300K. Many LMM advisors prefer modified because it’s more lucrative on $1-10M deals.

Should I hire an investment banker for a small business?

Generally no, unless the business has unusual structural complexity. Investment bankers’ fees and processes are calibrated for $10M+ EBITDA. Below that range, the fees consume too much value (1-3% of $5M is $50-150K, but plus $100-200K retainer means total IB compensation can exceed the M&A advisor alternative). Below $10M EBITDA, M&A advisor or buy-side partner is typically the better fit. Above $10M, IB resources start to justify the cost.

Can I use both a business broker and an investment banker?

Rarely useful. They overlap in function and represent the same side (sell-side). However, you can sequentially or in parallel use a buy-side partner with an LMM advisor — the buy-side partner introduces specific buyers we already know; the LMM advisor runs broader outreach for buyers outside our network. The trade-off is fee structure (LMM advisor expects exclusivity; buy-side partner doesn’t). Some sellers start with buy-side intros (free, no contract), evaluate, then engage an LMM advisor if broader auction is needed.

How long does each advisor’s process take?

Main Street broker: 9-18 months. M&A advisor: 6-12 months. Investment banker: 4-9 months. Buy-side partner: 60-120 days from intro to close. The reason buy-side is fastest: we already know the specific buyers; we don’t need to identify them through marketing outreach. Sell-side processes always include 8-16 weeks of marketing/outreach phase before any LOI — that phase is largely unnecessary when the buyer is already known.

Do investment bankers handle smaller deals than they used to?

Some boutique IBs have moved down-market to handle $5-10M EBITDA deals (the “LMM growth-end” specialty). The fees are typically 3-5% rather than 1-3%. The fit is best when the deal has structural complexity (rollover equity, ESOPs, recapitalizations) that justifies IB sophistication. For straightforward LMM deals, a relationship-driven M&A advisor or buy-side partner is usually a better economic fit.

What’s a buy-side partner and how does it work?

A buy-side partner works for the buyers, not the sellers. CT Acquisitions has direct relationships with 76+ active LMM buyers — search funders, family offices, lower middle-market PE, strategic consolidators. When a seller comes to us, we identify the 4-7 specific buyers we already know who fit their business, make introductions, and the seller decides whether to engage. The buyer pays us when a deal closes; the seller pays nothing. No retainer, no exclusivity, no 12-month contract. Best fit: $1M+ EBITDA in industries with known buyer pools.

Is a buy-side partner the same as a sell-side broker?

No, opposite direction of representation. A sell-side broker represents the seller and is paid by the seller (typically 6-12% of sale price plus retainers). A buy-side partner represents the buyers and is paid by the buyer at closing (typically 1-3% of transaction value, paid by the buyer, $0 to the seller). The trade-off: sell-side brokers run multi-buyer auctions for maximum bid; buy-side partners introduce specific buyers we already know for faster, lower-fee outcomes. For $1M+ EBITDA in known-buyer industries, the buy-side path is typically faster and cheaper.

How is CT Acquisitions different from a sell-side broker or M&A advisor?

We’re a buy-side partner, not a sell-side broker. Sell-side brokers represent you and charge you 8-12% of the deal (often $300K-$1M) plus monthly retainers, run a 9-12 month auction process, and require 12-month exclusivity. We work directly with 76+ buyers — search funders, family offices, lower middle-market PE, and strategic consolidators — who pay us when a deal closes. You pay nothing. No retainer, no exclusivity, no contract until a buyer is at the closing table. You can walk after the discovery call with zero hooks. We move faster (60-120 days from intro to close) because we already know who the right buyer is rather than running an auction to find one.