Match the advisor to your deal size
Advisory firms operate in bands. Large investment banks focus on transactions above a threshold where their fee model works. Mid-market firms and boutiques cover smaller deals, and independent advisors handle smaller mandates again.
Being at the bottom of a firm's range is a common problem. The mandate gets won by a senior partner and staffed by juniors, and attention drifts to larger deals. Being at the top of a smaller firm's range is usually the better position: your transaction matters to them.
Ask directly where your expected transaction value sits relative to their typical deal. Ask what their smallest and largest completed deals were in the past two years.
Buyer coverage is the core question
A sale process is only as good as the buyer list. Evaluate how the advisor thinks about buyers before you evaluate anything else.
Ask them to sketch the likely buyer universe for your business: strategic acquirers in your sector, adjacent strategics, private equity platforms with a relevant thesis, portfolio companies that could bolt you on, and international buyers looking for a market entry.
Then test the depth. Which of those buyers have they contacted in the past year? What did those buyers acquire recently, and at roughly what multiple range? Which ones are unlikely to move and why?
An advisor who can only produce the obvious list of three competitors has not done this in your sector.
Sector knowledge affects price, not just process
Sector knowledge shows up in valuation. An advisor who understands how buyers in your industry underwrite recurring revenue, churn, contract structure, backlog or regulatory approvals can frame your numbers in the terms buyers use.
The gap is visible in the information memorandum. A generic document describes the company. A sector-aware document answers the specific questions that particular buyer group asks in diligence, before they ask them.
Ask to see a redacted example of a memorandum from a comparable transaction.
Process design and discipline
Ask the advisor to describe the process they would run: broad auction, targeted auction with a shortlist, or bilateral negotiation with one preferred buyer. Each has different consequences for price, confidentiality, management time and risk of the news leaking to employees and customers.
A capable advisor will have a clear opinion and a reason for it based on your buyer universe rather than a standard template. They should also be able to explain the timetable in phases, what information is released at each stage, and how they intend to maintain competitive tension after first-round bids.
Who does the work
Confirm the deal team in writing. Which individual manages the process day to day, who attends management meetings, who negotiates, and what happens if that person leaves the firm mid-process.
Pitch teams often include a senior name who will not be present after signing the engagement letter. This is a common source of disappointment and it is easy to avoid by naming the team in the mandate.
References from sellers, not buyers
Ask for references from founders who sold, ideally in the past two years and in a comparable size band. Ask them about the parts of the process nobody puts in a pitch: how the advisor handled a buyer trying to reprice after diligence, how they managed the founder's own expectations, and how much of the drafting and negotiation the advisor actually did.
Where possible, also speak to someone whose process did not complete.
Fee terms in a sale mandate
Sale mandates typically combine a retainer with a success fee, sometimes with an incentive structure that increases the percentage above a target price. Points to examine: the fee base and whether it includes debt, cash, earn-outs and rollover equity, the treatment of an earn-out that may never pay out, the tail period after termination, exclusivity, and which expenses you carry.
A structure that pays a higher rate on value above a threshold aligns the advisor with maximising price rather than simply closing. Read the tail clause carefully: it determines what you owe if you sell to a contacted buyer after the mandate ends.
Confidentiality and internal communication
Sale processes leak. Ask how the advisor handles staged disclosure, code names, data room access rights, and communication with employees and customers if the process becomes known.
Practical experience shows here. Advisors who have managed leaks have a plan; those who have not will say it does not happen.