Millions or (nearly) bust
Hi Guys, my story will probably sound weird to you, but here it goes: I'm 43 with more than 15 years of investment advisory experience. Last year, when I was recently laid off of my brokerage job, a friend came to me. He was starting a company with another partner, and if I wanted to join. On paper it seemed great. Being my own boss was something I always wanted and they had about a dozen deals lined up + I was flush with savings and my personal account trading was going great. It was mostly corporate finance deals, and we had good contacts with funds wanting to lend. Cue a year later, all the deals seem to fall through and both my partners have quit. But the thing is, since networking a lot, I have landed a seller who wants to sell his 10 million Euro company (200k Euro fee) and I have found a buyer for it. But even better: this buyer wants to do this acquisition, and then he wants to merge (He even gave me a study with which companies) So after the acquisition he wants me to advise on the merger (a 2 million euro fee!) We get along pretty good, and had 2 produtive meetings and spoke on the phone a 3-4 times. I'm on first name basis with his secretary etc... Now you may say: looks good, but here it is. These deals could take a while, as you all know. And I am running out of savings+ my personal trading has slacked off considerably. I have 2 meetings with 2 M&A shops lined up: 1 small, where it will be commission only, so that's not really an option at the moment. But I want to listen to the guys anyway (They are more experienced than me, and I hope I can learn a thing or 2 +1 meeting with a medium sized shop. Now comes the reason that I posted this: What should I expect as a deal? Salary + commission split. I am hoping for half of the commission minus salary, is this realistic? Thanks. If all goes well we'll share abottle of Clos de Mesnil if you're ever around my neck of the woods.
not sure what you're saying, or the numbers. fees on deals are anywhere from 50bps to 200bps, but you're quoting 2mm on a 10mm dollar transaction?
if you're bringing in the deal, you can get any amount - you just have to argue for it. some banks MDs get 25%, other banks (smaller) can get more i assume. bb mds get less, because there is much more to selling a bank's services than just a singular md's abilities.
i re-read. so you're saying you're going to sell this company to company b, then company b has another merger lined up and wants you to advise on it. i don't understand why they would want you to advise on it, but who knows. if the deal is big enough, then i guess the fees make sense. maybe clarify your post a bit...
Ok TLDR Have 2 deals: Deal 1: 200k commission Deal 2: 2M commission. (+ I have 4 leads) I want to parlay these into a job at a midsize M&A Advisory. How much can I expect to make? Draw or salary + cut of commission. Thanks,
Update: talked to a small shop: They offered a 50/50 split but no draw/salary. Have to hussle for a retainer myself. Not really convinced. They have an ok trackrecord and a network. I said I would let them know next week Friday.
I don't know in Europe, but at least here in U.S it's not hard to find a broker dealer which will let you take up to 85-90% of the fee generated. If you don't need analysts and can produce your own material this makes a lot of sense. If you have your deals lined up, I wouldn't go for a salary position vs. higher retainer fee and payout percentages.
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