A founder holding a live offer faces a narrower cost question than a founder planning a sale two years out. The relevant comparison is the total cost of advice against the total cost of accepting a bilateral price. Windsor Drake publishes its full market data on retainers and success fee structures in the M&A advisor fee guide. This page applies that data to one situation: a live inbound offer with nothing signed.
What will an advisor cost me on my deal?
Take a live $20 million offer as the working case. A boutique advisor charges a monthly retainer of $5,000 to $15,000 on deals below $50 million in enterprise value. A live-offer engagement typically runs five to seven months from signed mandate to close, so budget six months at the $10,000 midpoint.
The success fee on a $20 million transaction falls in the 2 to 4 percent band that applies between $10 million and $50 million in enterprise value. Most boutiques also quote a minimum fee of $400,000 to $750,000, which a $20 million deal clears at 3 percent. Third-party costs complete the budget.
| Cost item | Basis on a $20M offer | Amount |
|---|---|---|
| Advisor retainer | $10,000 per month for 6 months | $60,000 |
| Advisor success fee | 3% of $20M, within the 2-4% band | $600,000 |
| Retainer credit at close | Credited against the success fee | ($60,000) |
| Sell-side quality of earnings | Market convention below $50M EV | $40,000 to $100,000 |
| M&A legal counsel | Purchase agreement through closing | $75,000 to $150,000 |
| Tax structuring | Pre-close entity and rollover planning | $15,000 to $40,000 |
| All-in total | 3.7% to 4.5% of the offer | $730,000 to $890,000 |
The all-in figure of $730,000 to $890,000 equals 3.7 to 4.5 percent of the $20 million offer. Roughly $130,000 to $290,000 of that total goes to third parties a founder would hire with or without an advisor. The incremental cost of the advisor alone is approximately $600,000 net of the retainer credit.
What does the fee buy when I already have an offer?
An advisor on a live offer builds the alternative the buyer currently knows does not exist. A serial acquirer prices an unrepresented founder differently from a represented one, because the acquirer’s corporate development team has closed dozens of transactions and the founder is closing a first. The mechanics of building that alternative are documented in the sell-side M&A process guide.
The work spans four areas: a defensible valuation model, a quiet market check with competing buyers, diligence defense on the numbers, and negotiation of structure terms such as earnouts and escrows. Structure moves as much money as headline price on lower-middle-market technology deals, and unmanaged structure terms routinely cost sellers more than any advisory fee.
What does negotiating alone cost?
Windsor Drake calls the cost of negotiating alone The Proprietary Discount: the gap between what a serial acquirer pays in an unbanked bilateral negotiation and what the same business clears in a competitive process. Market data across the lower middle market puts that gap at 15 to 25 percent of enterprise value. On a $20 million offer, The Proprietary Discount is worth $3 million to $5 million.
The break-even math is short. An all-in advisory cost near 4 percent is recovered if the advisor improves the outcome by 4 percent, and the documented gap is 15 to 25 percent. The expected return on the fee therefore runs four to six times its cost before structure improvements are counted. The fuller version of that analysis, including the cases where the answer is no, appears in Do I need a banker?
The discount compounds under time pressure. Acquirers attach expiration dates to bilateral offers precisely because an expiring offer discourages a market check. The playbook for the first weeks after an inbound approach is laid out in the offer-received guide.
Are there costs beyond the advisor?
A sell-side quality of earnings report costs $40,000 to $100,000 on deals below $50 million in enterprise value and is now market convention. Buyers apply their own discount to unaudited numbers when no QoE exists. The report is a cost of selling, not a cost of advice.
M&A legal counsel runs $75,000 to $150,000 on a $20 million transaction, covering the purchase agreement through closing deliverables. Tax structuring adds $15,000 to $40,000 and frequently returns a multiple of its cost through entity planning and rollover treatment. Both costs apply whether or not an advisor is engaged, so they belong to the cost of selling rather than the cost of advice.
Can I pay only if the deal closes?
Pure success-fee arrangements exist, mostly at the low end of the market. The structure creates a selection problem: an advisor who earns nothing before closing must run high volume, and a high-volume advisor is paid to close the fastest offer rather than the best one. A zero-retainer pitch is a signal about the advisor’s client list, not a discount.
The retainer aligns both sides. A retainer keeps the advisor solvent enough to recommend walking away from a bad deal, and it filters out sellers who are not committed to an outcome. Industry surveys show 72 percent of advisors credit the retainer against the success fee at closing, which makes the retainer a deposit rather than an added cost on deals that close.
What does Windsor Drake charge?
Windsor Drake prices at the top of the boutique range and does not discount. Engagements combine a monthly retainer with a success fee, and the firm accepts fewer than 20 mandates a year across its Toronto and New York offices. The full fee structure, with market survey comparisons and Lehman formula math, is published in the M&A advisor fee guide.
Approach Response is the Windsor Drake engagement for founders holding a live inbound offer. Approach Response applies the same retainer-plus-success-fee structure to a compressed timeline, and the first conversation carries no fee and no obligation.
When is the cost not worth it?
Below roughly $3 million in enterprise value, advisory economics stop working. A boutique minimum fee of $400,000 would consume more than 13 percent of proceeds, and no credible firm will quote it. A transaction attorney plus a light QoE serves that deal size better.
A genuinely full offer is the second case. An offer already sitting above the top of comparable-transaction multiples, verified against real market data rather than the buyer’s assertion, leaves an advisor little room to add price. Verification is the hard part, because the buyer is usually the only party in the room holding the comps.
A founder who has sold companies before is the third case. Prior exits teach the diligence rhythm and the structure traps that first-time sellers pay to learn. Even repeat founders typically retain counsel for structure terms and engage an advisor only when a competitive process is worth running.
A founder holding a live offer today can run that offer’s specific numbers through this math in an Approach Response conversation before committing to any fee.
Questions founders ask
How much does an M&A advisor cost on a $20 million offer?
Roughly $600,000 net to the advisor, built from a $10,000 monthly retainer over six months and a success fee near 3 percent, with the retainer credited at close. Adding third-party diligence and legal costs brings the all-in total to $730,000 to $890,000.
What is The Proprietary Discount?
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. Market data places the gap at 15 to 25 percent of enterprise value, worth $3 million to $5 million on a $20 million offer.
Do I need a quality of earnings report if the buyer is already running diligence?
Yes. A sell-side QoE at $40,000 to $100,000 is market convention below $50 million in enterprise value. Without one, the buyer’s diligence team controls the story the numbers tell and prices the uncertainty against the seller.
Is the retainer credited against the success fee?
Usually. Industry surveys show 72 percent of advisors credit the retainer against the success fee at closing, which makes the retainer a deposit on deals that close rather than an added cost.
Is a success-fee-only advisor cheaper?
Only on paper. An advisor with no retainer income needs volume, and a volume advisor is paid to close the fastest offer rather than the best one. The structure tends to cost more in final price than it saves in fees.
When should a founder skip the advisor?
Below roughly $3 million in enterprise value, minimum fees of $400,000 or more consume too much of proceeds to justify. A verifiably full offer or a founder with prior exits also weakens the case. A transaction attorney plus a light QoE covers those situations at a fraction of the fee.
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/what-an-ma-advisor-costs/
