What does a business broker actually do?
A business broker lists a company for sale and waits for inbound interest. The broker writes a short listing, posts it to marketplaces and a house buyer list, fields inquiries, and negotiates whatever offer arrives. The buyer pool is whoever happens to be looking that quarter.
Broker economics match the passive model. Brokers commonly charge 8 to 12 percent commission on small deals, usually with no retainer. A broker carries many listings at once and gets paid on volume across the whole book, so no single listing gets a market built around it.
What does an M&A advisor do differently?
An M&A advisor builds a market instead of waiting for one. Windsor Drake’s sell-side process opens with a buyer universe of 150 to 300 potential acquirers, approached in structured tiers, with staged bid deadlines that force competing offers to land at the same time. The buyer list is built for the specific company rather than pulled from a generic database.
Advisor economics match that work. An M&A advisor charges a monthly retainer, typically $5,000 to $15,000 below $50 million of enterprise value, plus a success fee between 2 and 6 percent depending on deal size. The retainer keeps a senior team staffed on one mandate for the 6 to 10 months a full process runs.
What is an investment bank, and when do you need one?
An investment bank runs the same structured sale process and adds capital markets capability, meaning debt placement and equity underwriting alongside M&A. Banks staff larger deal teams and carry regulatory infrastructure sized for transactions above roughly $150 million of enterprise value.
Bank infrastructure changes who gets attention. A $20 million mandate is small inside a large bank and lands with the junior bench, while the same mandate is a headline engagement at a boutique. Windsor Drake takes fewer than 20 mandates per year so that founder deals get senior staffing.
How do broker, advisor, and investment bank fees compare?
Brokers charge a straight commission, advisors charge a retainer plus a success fee, and banks charge lower percentages with large minimums. The table below compares the models on the dimensions that decide outcomes.
| Dimension | Business broker | M&A advisor | Investment bank |
|---|---|---|---|
| How buyers are found | Listing posted, inbound inquiries | Structured outreach to 40 to 80 buyers from a 200+ universe | Structured outreach plus capital markets relationships |
| Typical deal size | Below $2 to $3 million EV | $3 million to $150 million EV | Above $150 million EV |
| Fee model | 8 to 12 percent commission, no retainer | Retainer plus 2 to 6 percent success fee | 1 to 2 percent success fee with large minimums |
| What gets negotiated | The one offer that arrives | Multiple term sheets priced against each other | Multiple term sheets plus financing structure |
| Confidentiality | Public or semi-public listing | Confidential, NDA-gated approach | Confidential, NDA-gated approach |
Full market data on retainers, success fee bands, minimums, and what moves a quote inside each range sits on the Windsor Drake M&A advisor fees page.
What deal size fits a broker, and what fits an advisor?
Below roughly $2 million to $3 million of enterprise value, a broker or a marketplace is a rational choice. At that size an advisor’s minimum fee, commonly $400,000 to $750,000 at boutiques, consumes too much of the proceeds, and the realistic buyers are individuals and searchers who shop listings anyway.
From roughly $3 million to $150 million of enterprise value, an M&A advisor is the fit, because the buyer universe is large enough to run competition and the value at stake justifies a retained process. Above roughly $150 million, investment banks with capital markets desks take over.
Which should a founder holding an inbound offer hire?
A founder holding a live offer needs the offer priced against a market, and only an advisor-run process does that. A broker negotiates the one offer on the table. An M&A advisor brings 40 to 80 qualified buyers into the frame so the first bidder competes instead of dictating.
The Proprietary Discount is the gap between what a serial acquirer pays in an unbanked bilateral negotiation and what the same business clears in a competitive process, and Windsor Drake pegs that gap at 15 to 25 percent of enterprise value. A listing-and-waiting model cannot close The Proprietary Discount, because closing it requires outbound competition. The offer-received hub covers the first moves after an approach, and do I need a banker covers whether to hire representation at all.
What does a public listing do to perceived value?
A public listing signals availability, and availability invites low anchors. Buyers who browse marketplaces are conditioned to bid below asking, because a listed company has already declared that it needs a buyer.
A confidential process signals scarcity. Buyers enter under NDA, learn the company is exploring a sale only because they were selected, and bid knowing that dozens of competitors received the same materials on the same timeline. Scarcity, not availability, moves a bid toward the top of the range.
How do you vet a broker or an M&A advisor?
Ask any candidate for buyer-contact counts and outcomes on the last three mandates. An advisor who runs real processes can state how many buyers were contacted, how many signed NDAs, how many submitted bids, and how far the closing price moved from the opening offer.
A broker’s honest answer describes inquiries fielded rather than buyers contacted, and that answer tells you the model. Hire the counts rather than the pitch, and match the model to your deal size before signing an engagement letter.
If you are holding a live inbound offer and weighing representation, Approach Response is the Windsor Drake engagement built for that exact position.
Questions founders ask
Is a business broker cheaper than an M&A advisor?
A broker’s 8 to 12 percent commission is a higher rate than an advisor’s 2 to 6 percent success fee, but brokers take smaller deals and charge no retainer. On deals above $3 million of enterprise value, an advisor’s competitive process typically adds 15 to 25 percent of enterprise value, which outweighs the total fee.
Can a business broker run a competitive auction?
Most business brokers do not run structured competitive processes. The broker model rests on listings and inbound inquiries across a large book of mandates, while an advisor makes outbound contact with 40 to 80 selected buyers for one company.
At what company size should a founder stop using a broker?
Above roughly $2 million to $3 million of enterprise value, the buyer universe becomes large enough to run competition and an M&A advisor becomes the rational choice. Below that size, advisor minimum fees of $400,000 to $750,000 consume too much of the proceeds.
Does listing a company on a marketplace lower its value?
A public listing signals availability and invites low anchor offers. A confidential advisor-run process signals scarcity and forces buyers to bid against competitors, which supports pricing at the top of the range.
What is the difference between an M&A advisor and an investment bank?
An M&A advisor runs the sale process for deals between roughly $3 million and $150 million of enterprise value. An investment bank runs the same process with capital markets capability and larger teams, sized for deals above roughly $150 million.
What should a founder ask before hiring a broker or an advisor?
Ask for buyer-contact counts and outcomes on the last three mandates: buyers contacted, NDAs signed, bids received, and the spread between the opening offer and the closing price. Firms that run real processes answer with numbers.
Last reviewed July 28, 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/advisory/broker-vs-ma-advisor/