Buy-side versus sell-side

Definition

Which side of a deal an advisor is paid by, and therefore works for.

Why It Matters

Almost every business listed for sale is represented by somebody the seller hired, and that person owes their loyalty to the seller however helpful they are to you. A buy-side advisor is the mirror image: you hire them, you pay them, and the duty runs your way. Knowing which one is on the call changes what you volunteer, because anything you tell a listing broker reaches the person you are negotiating against, and it is not a leak when it happens. It is the job.

In numbers: A sell-side firm earning 10% of a $3M sale collects $300,000 out of the seller's proceeds, and none of it depends on the buyer paying a fair price.