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This isn't an a full list, but small businesses can be sold by business brokers (these tend to be less high tech oriented-think dry cleaners, or a tool & die company worth $700k), through word of mouth to industry buyers (your competitors) or sometimes if you have a VC backed tech co that never took off but isn't worth $0 they can pimp it to another of their portfolio companies or they'll have friends at other tech co's or VC firms who may buy it for one of their portfolio co's if the tech fits.

The fees involved just aren't enough to justify wasting the time on a $500k deal. Maybe, just maybe a banker at a boutique would make introductions as a favor because they've done business with that person before and made money but it wouldn't be worth any potential liability in the transaction to get involved for a $20k fee.

 

Right so according to my research a typical fee on an M&A deal is around 1%. Is that about right?

Also I sent you a PM some time ago:)

 

You have to pay far more than 1% for business brokers. $10k is a very small fee for a low-probability transaction. They generally have a sliding scale starting with the highest % and moving downward in case of an outlier (e.g. 5% for the first $500K, 4% for $500-750K, 2% of anything over).

We bump into these clowns at ACG and other MM-focused industry events. I am just warning you that many are greasy sales guys with little to no real understanding of financial markets. They will post deals on websites, email blast the world, etc. You cannot expect to get any value add from groups like this, except for your time.

Examples:

Sunbelt Business Brokers Cornerstone Business Advisors

 

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