Every year, Axial publishes its M&A Fee Guide, one of the few industry reports that provides meaningful benchmarking on how M&A advisors structure their engagements, success fees, retainers, and other terms. As someone who spends nearly every day advising technology business owners through acquisitions, I always enjoy reading it because it gives me an opportunity to compare what we’re seeing in the market with what hundreds of other advisors are experiencing. This year’s report, based on responses from more than 300 M&A advisors across North America, is no exception. It confirms that fee structures have remained relatively stable, Lehman formulas continue to dominate, minimum success fees are almost universal, and AI is beginning to influence conversations between advisors and prospective clients.
As informative as those statistics are, they also reminded me of something I have believed for many years. Business owners often spend far too much time asking what an M&A advisor charges and not nearly enough time asking how much value that advisor is capable of creating. Those are two very different questions, and the answer can mean millions of dollars when the transaction finally closes.
One transaction we completed earlier this year illustrates exactly what I mean.
The Fee Was Never the Story
Earlier this year, we successfully closed the sale of a technology company for more than $40 million at closing, with the opportunity for the shareholders to receive another $10 million through earnouts and future distributions. I had known the owners for many years, so our discussions were open and candid from the very beginning.
Like many business owners, one of the shareholders focused heavily on my fee during our engagement discussions. He wasn’t questioning whether they needed an advisor. He simply felt my fee was higher than he wanted to pay and wanted to negotiate it. After several conversations, we reached a compromise. He asked that my fee be capped if the transaction value came in below $40 million. Since everyone around the table believed that was probably the upper limit of what the company could achieve, there wasn’t much discussion about what would happen above that number.
Looking back, I smile because we were all negotiating two very different things.
They were negotiating my fee.
I was thinking about how to increase the value of their company.
The reason I was confident we could exceed $40 million had very little to do with negotiating tactics. It had everything to do with understanding the market.
Many advisors would have marketed that company strictly as an ERP consulting firm because, on the surface, that’s exactly what it was. But because RoseBiz has represented both ERP companies and Managed Service Providers for years, I understood something that wasn’t immediately obvious. To the right buyer, this wasn’t simply an ERP company. It was an opportunity for an established MSP platform to dramatically expand its ERP capabilities, increase wallet share with existing customers, strengthen recurring revenue, and differentiate itself from competing platforms.
That completely changed the buyer universe.
Instead of approaching only traditional ERP acquirers, we also introduced the opportunity to sophisticated MSP buyers who immediately understood the strategic value of adding ERP expertise to their existing business. Once those buyers entered the process, the competitive dynamics changed. We weren’t simply negotiating a multiple anymore. We were creating competition among buyers who valued the company for different strategic reasons.
The result was a transaction that exceeded $40 million at closing, with another $10 million of potential value still ahead.
Ironically, the shareholder who spent the most time negotiating my fee was one of the happiest people at closing because the additional value created during the process made our earlier fee discussions almost irrelevant.
That transaction reinforced something I tell prospective clients all the time.
The best advisors don’t justify their fees by charging less.
They justify their fees by creating more value.
What the Axial Survey Confirms
One statement in this year’s Axial report stood out to me more than any of the statistics. The report notes that higher-quality advisors often charge fees that are remarkably similar to lower-quality advisors. In other words, fee levels alone are not a reliable indicator of an advisor’s ability to deliver outstanding results.
That observation mirrors what I’ve seen throughout my career.
If you were selecting a surgeon to perform a complicated procedure, you probably wouldn’t choose the least expensive one simply because the price was lower. You would choose the surgeon who had successfully performed that operation hundreds of times because experience directly affects outcomes.
Selling a business deserves that same level of consideration.
Yet every year I meet owners who spend hours negotiating a quarter of a percentage point on an advisory fee while spending very little time evaluating the advisor’s transaction experience, industry specialization, buyer relationships, or negotiation skills. In my opinion, that approach often saves thousands of dollars while risking millions.
Experience Isn’t About Years in Business
Another statistic that caught my attention was the number of transactions completed by advisory firms over the past year. According to the survey, more than one-third of respondents completed only one to three sell-side engagements, another third completed four to six, and only about one-quarter completed seven or more transactions. Those numbers aren’t intended to criticize anyone. Every firm has its own business model, deal size, and client base.
What those statistics do remind us, however, is that transaction experience isn’t measured by how long someone has been in business. It’s measured by how many negotiations they’ve actually lived through.
Every transaction teaches something different.
One buyer aggressively challenges EBITDA adjustments. Another focuses on working capital. A third restructures the earnout. Legal issues emerge. Due diligence uncovers unexpected risks. Customer concentration suddenly becomes an issue. Purchase price allocations affect after-tax proceeds.
These situations aren’t hypothetical.
They happen on real transactions every single day, and the more transactions an advisor has completed, the more likely they’ve already seen those issues before.
That’s experience you simply can’t learn from a textbook.
Why Industry Specialization Creates Value
The transaction I described earlier also demonstrates another lesson that business owners sometimes overlook. Industry specialization doesn’t simply help an advisor sound more knowledgeable during management presentations. It changes how the company is positioned and, ultimately, who is willing to buy it.
Because RoseBiz focuses almost exclusively on technology companies, we’re constantly talking with strategic buyers and private equity-backed platforms that acquire MSPs, ERP firms, software companies, cybersecurity providers, cloud businesses, and other technology service firms. Those conversations provide insights into how buyers think, what capabilities they’re trying to acquire, and where they see strategic value that others may miss.
Sometimes the greatest value an advisor creates isn’t negotiating another half turn on the EBITDA multiple.
Sometimes it’s recognizing a buyer who sees strategic value that no one else has identified.
That was exactly what happened in this transaction.
The Real Work Begins After the Letter of Intent
One of the biggest misconceptions I encounter is the belief that once the Letter of Intent is signed, the difficult work is over. In reality, the months between the LOI and closing are often where the economics of a transaction are won or lost.
This is when buyers begin testing EBITDA adjustments, negotiating working capital targets, revising earnout provisions, requesting escrow holdbacks, and negotiating hundreds of pages of purchase agreement language. Every one of those discussions has the potential to affect the seller’s final proceeds.
An experienced advisor doesn’t disappear once the headline purchase price has been negotiated. They remain deeply involved throughout the diligence process, helping protect the value that was created during the competitive bidding process and keeping the transaction moving toward a successful closing.
So, What Should Sellers Focus On?
The Axial report provides valuable benchmarking for anyone beginning the process of selecting an M&A advisor. Understanding how engagement fees, retainers, minimum success fees, and success fee structures compare across the market is useful information, and I encourage every business owner to review the report.
However, when you’re interviewing advisors, I would encourage you to spend less time comparing fee schedules and more time understanding how each advisor intends to maximize the value of your business. Ask how many transactions they’ve completed in your industry. Ask how they identify strategic buyers. Ask how they create competitive tension. Ask how involved they remain after the Letter of Intent is signed.
In fact, I’ve written an entire article on this subject titled “Selecting a Technology M&A Advisor: Success or Disaster?“ because I believe those interview questions are among the most important decisions a business owner will make during the entire sale process.
Conclusion
The 2026 Axial M&A Fee Guide does an excellent job of bringing greater transparency to our industry, and I appreciate the effort that goes into compiling the data each year. The report confirms that advisor fee structures have remained relatively consistent, even as market conditions continue to evolve.
At the same time, if there’s one lesson I hope business owners take away from both the report and my own experience, it’s this: the cheapest advisor is rarely the least expensive decision.
The right advisor understands your industry, knows the buyer landscape, creates competition, protects value throughout due diligence, and ultimately helps you maximize what is likely the largest financial event of your life.
Years from now, you probably won’t remember whether your advisor charged three percent or four percent.
You will remember how much money was deposited into your bank account at closing.
And that’s the number that really matters.
No, AI Is Not Lowering MSP Valuations (At Least Not Yet)