Business owners considering an exit often underestimate the complexity of running a sale process. Sell-side advisors—also called M&A advisors or investment bankers—exist to represent the seller, manage the transaction, and maximize outcomes. But their role is often misunderstood, and timing matters significantly.

What Sell-Side Advisors Actually Do

A sell-side advisor acts as your representative throughout the exit process. Their responsibilities include:

1. Business Valuation and Positioning

Advisors assess your business's value based on financials, market comparables, and buyer appetite. They help position the business to highlight strengths and address potential weaknesses before going to market.

2. Buyer Identification and Outreach

Advisors maintain relationships with strategic buyers, private equity firms, family offices, and search funds. They conduct targeted outreach to qualified buyers who have the capital and strategic fit to close transactions.

3. Marketing Materials and Data Room Preparation

Advisors create the Confidential Information Memorandum (CIM)—a professional marketing document that presents your business to buyers—and organize financials, contracts, and operational data into a virtual data room for due diligence.

4. Process Management

Running a sale process is time-intensive. Advisors manage buyer communications, schedule management meetings, coordinate due diligence requests, and keep the process moving forward while you continue operating the business.

5. Negotiation and Deal Structuring

Advisors negotiate on your behalf—price, earnouts, payment terms, escrows, and transition obligations. Their experience in deal structure helps avoid pitfalls and protect your interests.

6. Transaction Closing

Advisors coordinate with legal, accounting, and financial teams to ensure all documents are executed, funds are wired, and the transaction closes successfully.

Sell-Side Advisors vs. Business Brokers

The terms are sometimes used interchangeably, but there are differences:

Both serve important roles, but larger, more complex transactions typically require M&A advisory expertise.

Timing: When Should You Engage a Sell-Side Advisor?

The best time to engage an advisor is earlier than most owners think. Waiting until you're ready to sell often means you've missed opportunities to maximize value.

12–18 Months Before Exit:

Many advisors recommend an initial conversation 12–18 months before you plan to exit. This gives time to address operational gaps, clean up financials, and position the business for maximum valuation. Think of this as pre-transaction advisory—not yet running a process, but preparing for one.

6–12 Months Before Exit:

This is when formal engagement typically begins. The advisor conducts valuation analysis, prepares marketing materials, identifies buyers, and launches the process. Most sale processes take 6–12 months from engagement to close.

Immediate Engagement:

If you've received an unsolicited offer, engaging an advisor immediately can help you assess whether the offer is fair, create competitive tension, and negotiate better terms. Never accept the first offer without understanding the market.

How Advisors Create Leverage in a Sale Process

The value of a sell-side advisor isn't just guidance—it's leverage. Here's how:

Competitive Process

Advisors create competition by reaching out to multiple qualified buyers simultaneously. When buyers know they're competing, they're more likely to put forth their best offer.

Market Intelligence

Advisors understand what similar businesses have sold for, what buyers are actively looking for, and what deal terms are market standard. This prevents owners from accepting below-market offers or unreasonable terms.

Emotional Distance

Selling your business is emotional. Advisors negotiate objectively, without attachment, and can walk away from bad deals that owners might accept out of exhaustion or fear.

What Does It Cost?

Sell-side advisory fees typically include:

• Monthly retainer: $10K–$50K/month (depending on deal size and complexity)
• Success fee: 3–10% of transaction value (structured on a Lehman scale or double Lehman for smaller deals)
• Minimum fee: Often $100K–$500K minimum total fee

While fees may seem high, good advisors typically more than pay for themselves through higher valuations, better terms, and fewer deal risks.

Do You Need an Advisor?

Not every exit requires an advisor. Consider going without one if:

• The transaction is straightforward (selling to a partner, employee, or family member)
• You have a single, well-qualified buyer already identified
• The business is very small (under $1M in value)

Engage an advisor if:

• You want to run a competitive process to maximize value
• You don't have experience selling businesses
• The transaction is complex (earnouts, rollover equity, multiple parties)
• You want to continue running the business during the sale process without distraction

Final Thoughts

Sell-side advisors are not gatekeepers—they're advocates. Their job is to represent your interests, create competitive tension, and guide you through a process you'll likely only go through once. The best advisors bring industry expertise, buyer relationships, and negotiation experience that can materially impact the outcome of your exit. If you're considering an exit, start the conversation early—even if you're not ready to pull the trigger yet.