With Analyst / Associate bonuses not tied to deals, has anyone heard of juniors at BB IB NYC receiving a finder's fee for bringing in a deal?
I'm an analyst at a BB who introduced a company looking to do a ~$200mm growth round (@ $1bn EV) to our coverage team.
The company had no previous relationship with the bank (neither investment nor corporate arms), and I know a member of the board of directors personally. Before bringing in seniors, the board member and I discussed my bank's ability to do the deal and previous transactions in the space. I then introduced the board member to the BB's Head of [Sector] IB, and subsequently we had a call with the Head of [Sector], Board Member, Founder/CEO, and myself. We are now having relatively advanced discussions about the merits of the deal and it seems they want to do it with us. All communication with the company is directly through me.
My bank's fee for something like this would be ~$5mm. We would also be extremely well positioned for a subsequent pre-IPO round, as well as an IPO in 2025, which would obviously be significant fee events.
Can I angle for a [10%] finder's fee here? One potential issue is the coverage group executing the transaction would be different than my own. I am also going to PE in the summer.
That's incredible man. I would negotiate with your team to get something in the contract that says if they do execute a mandate with the firm you will be paid X amount upfront and an additional y % if the deal actually closes (even if you are not there, happens all the time with senior bankers deferred compensation). Your leverage is that you control this relationship, and you can as easily take your business elsewhere and they really have no leverage on you given you're already leaving.
I think that's probably a bit aggressive, but definitely the ideal scenario.
When do you think is the best time to bring it up to my group head? Right as we're about to be mandated?
That's too late imo, if you're already about to be mandated then you've lost your leverage. You need to control the relationship in the same way that MDs control their client relationships and keep their client roster close to their chest.
When I was an analyst at a BB, it was very common for juniors to make some intros. Nobody talked about finder fees. I guess reward for that is still discretionary / part of your bonus. Not material.
What kinds of intros would juniors at your BB make?
I haven't heard of of juniors making C-level introductions with $5mm in immediate fee and >$20mm in future pipeline prospects on a regular basis, but maybe I'm mistaken. I doubt any incremental bonus would reflect my contribution. If I didn't exist, the bank would make 0 revenue from this client.
I’ve never heard of a junior getting a finders fee, but that doesn’t mean you can’t be the first!
My only concern is that it’s too late.
I feel like before you introduced the company to your BB, you should have negotiated this with your company contact and your firm.
I discussed with my company contact and they have been supportive, and I didn't want to bring it up to the BB until it had a reasonable chance of happening - nonetheless agreed I have less leverage today than I would before bringing them in.
Bad advice ig - deleted
Lol. huge conflict of interest
this can get you into a lot of legal/regulatory trouble with career altering implications.
OP here. For others to reference:
Spoke with the head of my group. No formal finder's fee, but "it will be remembered come bonus season". Let's see what happens.
There have been threads on this before with people in your situation, maybe you can look some of them up and DM them. The overwhelming consensus is do not get involved in this because all of the juniors making intros get screwed. Maybe they'll throw you an extra $10k bone, but BBs are not going to give you a $300k analyst bonus for this, just not part of their model. Especially when you're leaving, this is a fairly small deal for a BB, and the IPO is so far down the road. Might be different if you were already a senior associate looking to stay long term, where the goodwill in the group might be valuable.
TLDR; don't source deals as a junior and expect to get paid
Not sure I agree with you. Sure I didn't get paid and my bonus will likely not at all reflect the revenue this client will bring in, however marginal, but as I'm sure you know it's a small world and people tend to remember things like this. There's 0 downside to bringing in a client (except for the extra staffing you just subjected yourself to), and a good amount of potential upside, whether monetary (bonus TBD) or social (both with the bank and the client). Besides, it's a great learning experience in terms of client management, playing beyond your role etc.
I don't see how juniors in my position get screwed - it's not like I could do the deal for them on my own, without the bank.
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