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Business broker

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Quick Answer

A business broker intermediates the sale of smaller privately held companies, generally below the size band where a registered M&A advisor operates.1,2

What it is

The federal M&A broker exemption under Exchange Act § 15(b)(13) draws a statutory line around this seat: it applies to an eligible privately held company with no registered class of securities and, in the prior fiscal year, either EBITDA under $25 million or gross revenues under $250 million. Process discipline at the smaller end differs materially — fewer formal rounds, often no process letter, and a negotiated one-off rather than an auction.1,2

Operational context

What good looks like

Why It Matters

A seller choosing an intermediary is choosing a process archetype at the same time, and the archetype decides who drafts the definitive agreement first and when exclusivity attaches.1

Related Questions

What is the difference between a business broker and an M&A advisor?

The practical difference is the size of company each is built for, and the legal frame each operates under.

Browse all questions →

Frequently Asked Questions

What is Business broker in venture capital?

The federal M&A broker exemption under Exchange Act § 15(b)(13) draws a statutory line around this seat: it applies to an eligible privately held company with no registered class of securities and, in the prior fiscal year, either EBITDA under $25 million or gross revenues under $250 million.

Why is Business broker important for startups?

Understanding Business broker is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.

Sources & References

  1. 1.T1-07 — US Congress / Consolidated Appropriations Act 2023Securities Exchange Act § 15(b)(13) — statutory M&A broker exemption (eff. Mar 29, 2023)US Congress / Consolidated Appropriations Act 2023(A business broker intermediates the sale of smaller privately held companies, generally below the size band where a registered M&A advisor operates.)primary · T1 · sell-side-process · actor
  2. 2.T3-20 — Sidley AustinUS Congress Exempts Certain M&A Brokers From SEC Broker-Dealer RegistrationSidley Austin(A business broker intermediates the sale of smaller privately held companies, generally below the size band where a registered M&A advisor operates.)secondary · T3 · sell-side-process · actor

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