Q: What are standard finders fees or other compensation for assistance with fund
raising, acquiring strategic partners, etc.?
- Fees seem to range all over the lot. The ones you have to be most concerned about are
up-front fees, or retainers, because you need to do a lot of due diligence to see if you
can trust the "finder" and soul searching to see whether you can afford the fee.
- In terms of traditional finders fees for equity-type financing, the fee usually ranges
from 5-10%; 5% being average and 10% being a swell deal. [David J.
- Another common "success" fee is the so-called Lehman Formula: 5% of the first
$1 million; 4% of the second, and so on. [Thomas Hasler,
- Some have asked for as much as 10% up front, 10% of the resulting company and 30% of the
gross revenues of year three. For a deal size of $500K-1million, you may not be interested
in paying that much. [M. Christopher Davies, firstname.lastname@example.org]
- Another option is to give equity instead of a cash fee. It may be as much as 15%. [Tracey Mathieu, MsTMathieu@aol.com]
Q2: Whats a typical fee for a headhunter?
- For recruiting, a more common figure is around 20% to find a well-qualified candidate.
The client then usually adds a "trial period" of 60 to 90 days. If the new hire
quits within that period, the recruiting firm is obligated to refund the money if they
can't find a replacement in that same period of time. In some cases, the headhunter can
ask for 20% and ask to be paid on a graduated scale (10% on signing, 5% for the next
[Alex Duong Nghiem, email@example.com]