What a sell-side advisor is actually for
An advisor is not there to find you a buyer. Most owners can name three. An advisor is there to make sure that the buyer who wants the business most has to compete for it, and that the terms which decide what you actually collect are negotiated before you lose the leverage to negotiate them.
Those are two different jobs and firms are good at different ones. The first is process: building a real buyer universe, running a disciplined timeline, and creating a situation where more than one party is moving at once. The second is execution: the purchase agreement, the working capital peg, the earnout definitions, the closing balance sheet. Value is created in the first and protected or lost in the second.
A firm that is strong on the first and thin on the second will get you an impressive headline number and hand the mechanics to your lawyer. That is where sellers get retraded.
The first question: who do they represent?
Ask whether the firm ever acts for buyers. The answer changes how everything else should be read.
A firm that represents acquirers has relationships it needs again next year. You are a single transaction; the buyer is a pipeline. That does not make anyone dishonest, and plenty of dual-sided firms run clean processes. It does create a structural pull, and structural pulls do not announce themselves. They show up as an advisor who is slightly quicker to call an offer fair, slightly slower to push a repeat counterparty, and slightly more relaxed about a term that a first-time seller does not know to fight.
A sell-side-only firm has no buyer relationship to protect. Its entire commercial interest is the number and the terms you close on, because that is the only thing it gets paid for and the only thing it can point at afterward.
If a firm does both, ask directly how conflicts are managed, and ask for the answer in writing before you sign.
The second question: who actually runs it?
The most common gap between the pitch and the process is staffing. A senior person wins the mandate. A junior person runs it. The owner discovers this in week three, when the questions coming back show that whoever is reading the data room has never operated anything.
Ask, by name, who will run the file day to day. Ask what else that person is working on right now and how many live mandates they carry. Ask who will be in the room for the buyer meetings and who will negotiate the purchase agreement. Then ask what happens if that person leaves mid-process.
In a lower-middle-market sale the answers matter more than in a large one, because there is no depth of bench. On a $20M transaction there is no team. There is a person, and you should know which person.
The third question: how are they paid, and what does that make them do?
Fee structure is not an administrative detail. It is the incentive design of your transaction, and it determines what your advisor does when a merely acceptable offer lands on the table in month five.
| Structure | What it rewards | What to watch |
|---|---|---|
| Success fee only, flat percentage | Closing something | The advisor earns nearly as much on a mediocre deal as a strong one, so the marginal effort to push for more is unpaid |
| Retainer or work fee plus success fee | Doing the preparation properly | Standard and generally healthy, provided the retainer is credited against the success fee |
| Tiered or incentive fee above a threshold | Closing higher | The best-aligned structure available. Ask for it. Where the threshold sits is the real negotiation |
| Fee payable on any transaction during a long tail | The advisor, not you | A tail beyond eighteen to twenty-four months, or one covering buyers the advisor never contacted, is a trap |
Read the tail clause specifically. It states that if you sell within a defined period after the engagement ends, the fee is still owed. That is reasonable for buyers the advisor introduced. It is not reasonable when it covers every party in the market for three years.
Windsor Drake sets out how these structures work, and what each one makes an advisor do, in how success fees work and what an M&A advisor costs.
The fourth question: what is the buyer list, really?
Every firm will tell you it has relationships. The question is what kind.
A list is not valuable because it is long. Two hundred names contacted by templated email produces a low response rate and a signal to the market that the business is being shopped. A list is valuable when the parties on it have a live thesis in your space, capital available now, and a decision-maker the advisor can reach without going through a form.
Ask how the list will be built, how many parties they expect to contact, how many they expect to sign an NDA, and how many they expect to submit an indication of interest. An advisor who has run this before will give you numbers. One who has not will talk about their network.
Ask specifically whether the list includes strategic acquirers as well as financial ones, and serial acquirers who buy in your sector repeatedly. Windsor Drake publishes profiles of the most active acquirers in its coverage, including what they typically pay and how they structure, in the acquirer files.
The fifth question: what happens after the price is agreed?
This is the question almost nobody asks, and it is where a meaningful share of the purchase price is decided.
Between a signed letter of intent and money in your account sit a working capital peg whose methodology is usually still open, a closing balance sheet somebody in your company has to produce during the week of closing, inventory and receivable balances a buyer’s analyst will test, and, in most structures, an earnout whose definitions decide whether a meaningful part of the headline is collectable at all.
Ask who at the firm handles that work and what they have done before. An advisor whose answer is that the lawyers deal with it has told you something important, because these are finance questions rather than legal ones. The purchase agreement records the outcome; it does not produce it.
Windsor Drake covers this ground directly in the working capital adjustment and earnout structures, both reviewed by Michael Culhane, who has been a chief financial officer since 2009 and has closed and executed transactions from the seller’s side.
Questions to ask before you sign
Take these to every firm you meet. The answers are more informative than the pitch.
Start with conflict. Ask whether the firm ever represents buyers, how conflicts are handled if it does, and whether you can have that answer in writing rather than as reassurance across a table.
Move to staffing. Ask who personally runs the process day to day and what else that person is carrying right now. Ask separately who negotiates the working capital peg and the earnout definitions once a price is agreed, and whether that person has ever held the chief financial officer seat, because those are finance questions rather than legal ones and the answer is usually revealing.
Then price and process. Ask what they think the business is worth, what that view is based on, and whether they will put it in writing before you go to market. Ask how the buyer list will be built, and whether they will show you their research on the acquirers in your sector before you sign anything rather than after.
Then money. Ask for the full fee schedule including the tail period, what is owed if you take the business off the market, and whether the retainer is credited against the success fee.
Then ask what happens in the ninety days after the price is agreed, and who inside the firm actually does that work.
Finally, ask what the firm has published that you can go and check for yourself.
The last one separates firms faster than anything else on the list. A pitch deck is written for you and cannot be checked. Published work can be read by anyone, tested against the record, and held against the firm later. A firm that will not put its reasoning where the market can see it has decided its arguments only survive in a room where nobody can check them.
Signals to walk away
A valuation quoted before any diligence. A number produced in a first meeting is a sales tool, not an analysis, and the firms most willing to name one early are the firms most likely to revise it down later.
Pressure to sign quickly. A firm that is genuinely busy does not need your signature this week.
A tail period beyond eighteen to twenty-four months, or one that covers buyers the firm never approached.
Refusal to name the person who will run the process.
Any suggestion that a specific price is guaranteed. Nobody can promise that, and an advisor who implies it is telling you how they will handle the rest of the truth.
How Windsor Drake is set up
The firm is structured around the answers above, because those are the questions that were being answered badly across the market.
Sell-side only. Windsor Drake does not represent acquirers, ever. There is no buyer relationship to protect and no repeat counterparty whose goodwill is worth more than a single client’s outcome.
Senior-led execution. The people who win the mandate run the mandate. Founder-led companies at $5 million to $300 million of enterprise value do not have the leverage to be somebody’s training file.
Execution as a named discipline. Post-signing mechanics are treated as a distinct capability rather than something delegated to counsel, and reviewed by a chief financial officer who has sat on the seller’s side of the table.
A published position. The firm publishes what it believes about pricing, including The Windsor Drake Proprietary Discount Index, which measures the gap between what a serial acquirer pays in an unbanked bilateral negotiation and what the same business clears in a competitive process. Credentials that cannot be checked are not credentials, so the record and the reasoning are on the site rather than in a pitch deck.
If a buyer has already approached you and you are deciding whether you need an advisor at all, that is a specific situation with a specific answer: do I need a banker if I already have a buyer, and the Approach Response engagement built for it.
Questions founders ask
What questions should I ask an M&A advisor before signing?
Ask who will personally run the process day to day and what else they are working on. Ask what they think the business is worth, what that view is based on, and whether they will put it in writing before you go to market. Ask whether the firm ever represents buyers. Ask for the fee schedule in writing, including the tail period and what happens if you walk away. Ask how the buyer list is built and to see their research on acquirers in your sector. Ask who negotiates the working capital peg and the earnout definitions, and whether that person has ever held the chief financial officer seat. Ask what the firm has published that you can go and check yourself.
Should I use an advisor who represents both buyers and sellers?
A firm that represents buyers has relationships it needs again next year, and you are a one-time client. That does not make it dishonest, but it creates a structural pull toward the repeat counterparty. A sell-side-only firm has no buyer relationship to protect. If the firm does work both sides, ask directly how conflicts are handled and get the answer in writing.
How much does an M&A advisor cost?
Lower-middle-market sell-side engagements typically combine a retainer or work fee with a success fee payable on close. The success fee is the number that matters and it is negotiable, particularly the incentive structure above a threshold price. What matters more than the headline percentage is what the structure makes the advisor do: a flat percentage rewards closing anything, while a tiered structure rewards closing higher.
How many buyers should an advisor contact?
There is no correct number, and list length is a poor proxy for quality. What matters is whether the list contains parties with a live thesis in your space, budget available now, and a decision-maker the advisor can reach directly. Ten buyers who each have a reason to want the business will produce a better outcome than two hundred contacted by email blast.
What are the signs I should walk away from an advisor?
A valuation quoted before any diligence. Pressure to sign quickly. A tail period longer than eighteen to twenty-four months. Refusal to name who will actually run the process. An unwillingness to put the buyer approach strategy in writing. And any suggestion that a specific price is guaranteed, which nobody can promise.
Do I need an advisor if I already have a buyer?
Having one buyer is the situation where advice is worth the most, not the least, because a single unopposed buyer sets the price. The question is not whether the buyer is fair but whether the number would survive competition. Windsor Drake handles this specific case through the Approach Response engagement.
Last reviewed August 27, 2026 by Jeff Barrington, Founder and Managing Director, Windsor Drake. Content on this page may be cited with attribution and a link to https://windsordrake.com/how-to-choose-an-ma-advisor-to-sell-your-company/