Choosing a business broker or M&A advisor in Singapore

The market ranges from listing websites to Big Four corporate finance, and most owners only do this once. Here is how to tell the models apart.

The models

Listing marketplaces publish your business to anyone browsing. Cheap, fast, and the confidentiality risk is entirely yours. You run the screening, the NDAs, the negotiation and the diligence.

Business brokers run a process for a success fee, typically a percentage of the sale price. Quality varies widely. The good ones bring a real buyer network and manage diligence; the weak ones send your teaser to a list and wait.

M&A advisory firms work on a retainer plus success fee, usually above a certain deal size. You pay whether or not it sells, and in exchange you get more resourcing.

Big Four and investment banks generally start above thirty million dollars of value. Below that you will not be a priority even if they take the mandate.

Questions worth asking

How many businesses like mine have you actually sold, and when. Who specifically will run my mandate day to day. How many buyers will you approach, and are they a real list or a database. What is your fee, in writing, including what happens if I withdraw, and what happens with a buyer who approached me directly. How do you protect confidentiality, mechanically. What is your view of what my business is worth, and what would change it.

Warning signs

A valuation that sounds high and comes with no reasoning. Reluctance to put fees in writing before you commit. An exclusivity period longer than a year with no performance condition. Pressure to sign at the first meeting. A firm that will not tell you honestly when a sale is premature.

On dual roles

Ask directly whether the firm also takes a fee from the buyer. There is a defensible answer to that question, where the buy-side fee pays for process services and both fees are disclosed to both sides. There is no defensible answer that involves evasion.

The most useful signal

An advisor who tells you not to sell yet, and explains why, is worth more than one who tells you what you want to hear. The first conversation should end with a plan, not a mandate.