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What Do M&A Advisor Fees Cost in Canada in 2026? · Selling Your Canadian Business

• 0:31
  SPEAKER_00: Picture this.
• 0:32
  SPEAKER_00: You have uh you've spent the last ten years basically bleeding for your company.
• 0:36
  SPEAKER_01: Oh yeah, the classic founder grind.
• 0:38
  SPEAKER_00: Right.
• 0:39
  SPEAKER_00: You survived the late nights, the payroll panics, the completely shifting markets, and you finally did it.
• 0:46
  SPEAKER_00: You're selling your business for twenty million dollars.
• 0:49
  SPEAKER_01: Huge moment.
• 0:50
  SPEAKER_00: Massive.
• 0:51
  SPEAKER_00: Champagne is poured, you are celebrating, but then the dust settles.
• 0:55
  SPEAKER_00: And the invoice from your mergers and acquisitions advisor slides across the table.
• 0:59
  SPEAKER_01: Aaron Powell making your stomach completely drop.
• 1:02
  SPEAKER_00: It really does.
• 1:03
  SPEAKER_00: Because suddenly you see all those zeros.
• 1:05
  SPEAKER_00: So today, we are taking a deep dive into demystifying exactly who gets a cut of your life's work and why.
• 1:11
  SPEAKER_01: Aaron Powell Which is such an important topic because understanding these advisory fees, especially in Canada in 2026, it isn't just about budgeting.
• 1:19
  SPEAKER_00: No, it's much deeper than that.
• 1:20
  SPEAKER_01: It is.
• 1:21
  SPEAKER_01: It's about knowing how the MA game is actually played, understanding the invisible math happening behind the scenes so you can maximize your final payout.
• 1:29
  SPEAKER_00: Aaron Powell And honestly, it's the ultimate final boss challenge for any founder.
• 1:32
  SPEAKER_01: Aaron Powell It really is.
• 1:34
  SPEAKER_01: The fee structure of an MA advisor, it isn't arbitrary.
• 1:37
  SPEAKER_01: It's a direct reflection of risk, leverage, and you know, market mechanics.
• 1:42
  SPEAKER_00: Aaron Powell Exactly.
• 1:43
  SPEAKER_00: When you actually understand how your advisor makes their money, you suddenly understand how to align their financial incentives with your own.
• 1:50
  SPEAKER_01: Aaron Powell, which is a secret to a great exit.
• 1:52
  SPEAKER_00: Right.
• 1:52
  SPEAKER_00: And that is exactly what we are going to break down today, looking specifically at the Canadian market in 2026.
• 1:58
  SPEAKER_01: We've got some great data for this.
• 2:00
  SPEAKER_00: We do.
• 2:01
  SPEAKER_00: We are pulling insights from this incredibly detailed briefing provided by the Shaunacy Group on MA advisory fees.
• 2:08
  SPEAKER_00: Plus, we have a fantastic essential book recommendation for you.
• 2:12
  SPEAKER_01: Oh, if you are anywhere near this process, you absolutely need to read that book.
• 2:17
  SPEAKER_00: 100%.
• 2:18
  SPEAKER_00: We have linked it right in the show notes for you.
• 2:20
  SPEAKER_00: You can find it at Amazon.ca slash DP slash B0GFX W J V XQ.
• 2:29
  SPEAKER_00: Just uh click and bookmark that for later.
• 2:31
  SPEAKER_01: Yeah, get a physical copy and take notes.
• 2:33
  SPEAKER_00: For sure.
• 2:34
  SPEAKER_00: Okay, let's unpack this.
• 2:36
  SPEAKER_00: Because before we look at the actual dollar amounts on an advisor's invoice, we need to understand the ecosystem that generated it.
• 2:43
  SPEAKER_01: Right, the current 2026 market climate.
• 2:45
  SPEAKER_01: Trevor Burrus, Jr.
• 2:45
  SPEAKER_00: Yeah, because market reality directly dictates the cost of these services.
• 2:49
  SPEAKER_00: And the MA landscape shifted wildly between 2023 and 2025.
• 2:54
  SPEAKER_01: Aaron Powell Rewired is the perfect word for what happened there.
• 2:57
  SPEAKER_00: Aaron Powell It really is.
• 2:58
  SPEAKER_00: Because the external market factors over that period completely changed the fundamental timeline of a deal.
• 3:02
  SPEAKER_01: Aaron Powell Radically changed it.
• 3:04
  SPEAKER_01: Historically, you know, you might have expected to close a mid-market sale in maybe six to nine months.
• 3:09
  SPEAKER_01: Trevor Burrus, Jr.
• 3:09
  SPEAKER_00: Which feels like a reasonable timeline.
• 3:10
  SPEAKER_00: Trevor Burrus, Jr.
• 3:11
  SPEAKER_01: Right.
• 3:11
  SPEAKER_01: But today, you are looking at 12 to 18 months minimum.
• 3:15
  SPEAKER_00: Aaron Powell I mean, selling a business isn't like selling a used car where you hand over the keys and get cash in an hour.
• 3:20
  SPEAKER_01: Aaron Powell I wish it was that easy.
• 3:21
  SPEAKER_00: Right.
• 3:22
  SPEAKER_00: It's more like navigating a massive cargo ship into a tiny port.
• 3:26
  SPEAKER_00: But for the founders listening who are used to operating with speed, what is dragging these deals out for a year and a half?
• 3:34
  SPEAKER_01: Aaron Powell Well, it really comes down to the depth of the due diligence.
• 3:37
  SPEAKER_00: Buyers are just getting skittish.
• 3:38
  SPEAKER_01: Completely.
• 3:39
  SPEAKER_01: Buyers have become incredibly risk-averse.
• 3:43
  SPEAKER_01: They aren't just looking at your top-line revenue anymore.
• 3:45
  SPEAKER_00: So what are they looking at?
• 3:47
  SPEAKER_01: Everything.
• 3:48
  SPEAKER_01: They are executing forensic financial audits, deep dive quality of earnings reports, and just intense reviews of your intellectual property.
• 3:56
  SPEAKER_01: Wow.
• 3:57
  SPEAKER_01: Yeah, and customer retention metrics.
• 3:59
  SPEAKER_01: The legal and regulatory hurdles have also compounded.
• 4:02
  SPEAKER_01: Buyers want absolute certainty before they wire$20 million.
• 4:06
  SPEAKER_00: Aaron Powell Which makes sense.
• 4:07
  SPEAKER_00: But that means the MA advisor has to manage a massive, highly complex transaction that is constantly under threat of falling apart for over a year.
• 4:16
  SPEAKER_01: Exactly.
• 4:17
  SPEAKER_01: It's high stress for 18 months straight.
• 4:19
  SPEAKER_00: But here is the data point from the briefing that actually made my jaw drop.
• 4:23
  SPEAKER_01: The profitability survey?
• 4:24
  SPEAKER_00: Yes.
• 4:25
  SPEAKER_00: They surveyed 456 middle market MA professionals about this exact period.
• 4:31
  SPEAKER_00: And in a market where deals are taking twice as long and buyers are significantly more hesitant, nearly half of the advisors kept their profitability entirely stable.
• 4:41
  SPEAKER_00: It's wild.
• 4:42
  SPEAKER_00: And it gets crazier.
• 4:43
  SPEAKER_00: An astonishing 33% actually saw an increase in profitability.
• 4:47
  SPEAKER_00: I need you to explain the mechanics of that because how does a brutally slow, difficult market make a third of these advisors richer?
• 4:55
  SPEAKER_01: It sounds like a total paradox, doesn't it?
• 4:57
  SPEAKER_00: It really does.
• 4:58
  SPEAKER_01: If we connect this to the bigger picture, it makes perfect sense when you look at the mechanics of survival.
• 5:04
  SPEAKER_01: When the timeline stretched from six months to 18 months, advisors realized they'd literally go bankrupt if they relied entirely on getting paid at the finish line.
• 5:13
  SPEAKER_00: Right.
• 5:13
  SPEAKER_00: They can't float a business for a year and a half on zero income.
• 5:16
  SPEAKER_01: Exactly.
• 5:17
  SPEAKER_01: So the smartest firms fundamentally restructured their pricing models.
• 5:21
  SPEAKER_01: They started demanding higher, non-refundable monthly retainers to cover their operational burn rate.
• 5:26
  SPEAKER_00: Oh, okay.
• 5:27
  SPEAKER_01: But more importantly, they became ruthless about the clients they took on.
• 5:31
  SPEAKER_00: Aaron Powell Meaning they dropped the long shots.
• 5:33
  SPEAKER_01: Precisely.
• 5:34
  SPEAKER_01: In a boom market, an advisor might take a gamble on a slightly overpriced business because, you know, a rising tide lifts all boats.
• 5:40
  SPEAKER_00: Right.
• 5:40
  SPEAKER_00: Everything sells in a boom.
• 5:42
  SPEAKER_01: Exactly.
• 5:43
  SPEAKER_01: But in the 2023 to 2025 slowdown, they dumped the tire kickers.
• 5:49
  SPEAKER_01: They only signed A-tier companies, businesses with bulletproof books and realistic valuation expectations.
• 5:55
  SPEAKER_00: Aaron Powell So they were basically running leaner operations, charging higher upfront fees to a more select group of highly sellable clients.
• 6:03
  SPEAKER_01: Aaron Powell You nailed it.
• 6:04
  SPEAKER_01: By shifting some of that timeline risk back onto the seller through the retainer, the top 33% actually increased their margins.
• 6:12
  SPEAKER_00: Aaron Powell Though they basically built a sturdier, highly exclusive ship for a much longer voyage.
• 6:17
  SPEAKER_01: Aaron Powell That's a great analogy.
• 6:18
  SPEAKER_00: Aaron Powell Which brings us directly to the actual invoice.
• 6:21
  SPEAKER_00: Let's dissect this three-part structure because the first major line item is that monthly work fee or the retainer.
• 6:28
  SPEAKER_01: Yes, component number one.
• 6:30
  SPEAKER_00: In 2026, the standard is sitting between$5,000 and$10,000 a month.
• 6:34
  SPEAKER_01: Aaron Powell Right.
• 6:35
  SPEAKER_01: And that covers all that grueling preliminary work we just mentioned, preparing the documents, building the massive data room, evaluating the initial buyers.
• 6:43
  SPEAKER_00: So what does this all mean?
• 6:45
  SPEAKER_00: Because I have to push back here on behalf of anyone listening.
• 6:48
  SPEAKER_01: Go for it.
• 6:49
  SPEAKER_00: If I am paying$10,000 a month for an 18-month deal cycle, that is almost$200,000 out of my pocket before we even sell.
• 6:59
  SPEAKER_01: Aaron Powell It is a lot of cash to burn.
• 7:00
  SPEAKER_00: Aaron Powell Yeah.
• 7:01
  SPEAKER_00: What happens if we get to month 17, the buyer finds something they don't like in the audit, and they just walk away?
• 7:07
  SPEAKER_00: Does the advisor just pocket my$200,000 while I get nothing?
• 7:11
  SPEAKER_01: That is the exact cynical and entirely necessary question every founder should be asking.
• 7:16
  SPEAKER_00: Aaron Powell Because it feels like a huge risk.
• 7:18
  SPEAKER_01: Aaron Powell It is.
• 7:19
  SPEAKER_01: And the short answer is yes.
• 7:21
  SPEAKER_01: If the deal completely dies, that monthly fee is gone.
• 7:24
  SPEAKER_01: It's a sunk cost.
• 7:25
  SPEAKER_01: Ouch.
• 7:26
  SPEAKER_01: I know.
• 7:26
  SPEAKER_01: But it paid for the hundreds of hours of analyst time, the marketing materials, and the negotiations that happened over those 17 months.
• 7:34
  SPEAKER_01: The advisor's lights had to stay on.
• 7:36
  SPEAKER_00: Right.
• 7:36
  SPEAKER_00: They did the work.
• 7:37
  SPEAKER_01: But and this is the crucial mechanism that changes the entire psychology of this fee.
• 7:42
  SPEAKER_01: If the deal does close, that monthly retainer is almost always credited against the final success fee.
• 7:48
  SPEAKER_00: Aaron Ross Powell, meaning it's deducted from the final bill?
• 7:50
  SPEAKER_01: Aaron Powell Precisely.
• 7:51
  SPEAKER_01: It is not an extra tax on top of the final percentage.
• 7:54
  SPEAKER_00: Oh.
• 7:54
  SPEAKER_01: It functions much more like a down payment.
• 7:56
  SPEAKER_01: You are paying into the final cost in installments.
• 7:59
  SPEAKER_00: Aaron Powell Okay.
• 8:00
  SPEAKER_00: That changes the math significantly.
• 8:03
  SPEAKER_00: It's not a separate sunk cost if you actually cross the finish line.
• 8:06
  SPEAKER_01: Exactly.
• 8:07
  SPEAKER_00: But it still requires the founder to absorb a lot of risk up front.
• 8:11
  SPEAKER_00: Why not just demand the advisor work purely on commission?
• 8:14
  SPEAKER_00: Like if they believe in my business so much, they should take the risk, right?
• 8:18
  SPEAKER_01: Aaron Powell Because the retainer is a two-way filter.
• 8:21
  SPEAKER_01: From the advisor's perspective, they need to know you are serious.
• 8:24
  SPEAKER_00: Uh skin of the game.
• 8:25
  SPEAKER_01: Exactly.
• 8:26
  SPEAKER_01: If a seller wasn't paying a monthly fee, they might just casually test the market, force the advisor to do a thousand hours of intensive financial modeling, and then just say, you know what?
• 8:36
  SPEAKER_01: I think I'll just pass the business on to my kids instead.
• 8:38
  SPEAKER_00: Oh right.
• 8:39
  SPEAKER_00: And the advisor gets completely burned.
• 8:42
  SPEAKER_01: Exactly.
• 8:43
  SPEAKER_01: The monthly fee ensures the business owner is genuinely committed.
• 8:46
  SPEAKER_01: It forces alignment.
• 8:48
  SPEAKER_01: You are both financially committed to crossing that finish line.
• 8:50
  SPEAKER_00: Aaron Powell, which naturally brings us to component number two of the invoice, the actual finish line, the success fee.
• 8:57
  SPEAKER_01: Aaron Powell This is the massive payday.
• 8:59
  SPEAKER_00: Yeah.
• 8:59
  SPEAKER_00: And it is entirely performance-based.
• 9:02
  SPEAKER_00: Now, the briefing heavily references something called the Lehman formula.
• 9:06
  SPEAKER_00: Let's break this down because the math is fascinating.
• 9:08
  SPEAKER_00: Where does this even come from?
• 9:10
  SPEAKER_01: Aaron Powell Well the Lehman formula originates from Lehman Brothers back in the 1970s.
• 9:14
  SPEAKER_00: Oh wow, that far back.
• 9:16
  SPEAKER_01: Yeah.
• 9:16
  SPEAKER_01: During that era of investment banking, they needed a standardized way to bill mid-market clients.
• 9:21
  SPEAKER_00: Makes sense.
• 9:22
  SPEAKER_01: Right.
• 9:22
  SPEAKER_01: Because if you charged a flat 5% on every single deal, you'd alienate the massive companies because the fee would be astronomical.
• 9:29
  SPEAKER_01: Aaron Powell Yeah.
• 9:29
  SPEAKER_00: 5% of a billion dollars is crazy.
• 9:32
  SPEAKER_01: Aaron Powell Exactly.
• 9:33
  SPEAKER_01: But if you charged a flat 1%, you'd go bankrupt working on the smaller$5 million deals.
• 9:38
  SPEAKER_01: Ah, I see.
• 9:39
  SPEAKER_01: What's fascinating here is how they solved it.
• 9:41
  SPEAKER_01: They created an inversely scaling formula.
• 9:44
  SPEAKER_01: The classic structure was 5% of the first million, 4% of the second, 3% of the third, and so on.
• 9:50
  SPEAKER_00: Aaron Ross Powell And obviously inflation and deal sizes have grown since the 70s, so the modern 2026 version has adapted.
• 9:58
  SPEAKER_01: It has.
• 9:59
  SPEAKER_00: Let me just give the listeners the current baseline examples from our sources, just so we have real numbers to work with.
• 10:04
  SPEAKER_00: On a$5 million transaction, the advisor typically takes about 5.5%.
• 10:09
  SPEAKER_01: Right.
• 10:10
  SPEAKER_00: But if your business sells for$20 million, that percentage drops to 3.7%.
• 10:16
  SPEAKER_00: And if you are selling a massive$100 million company, the fee drops all the way down to 2.1%.
• 10:23
  SPEAKER_01: Exactly.
• 10:23
  SPEAKER_00: So the bigger the deal, the smaller is the slice the advisor takes.
• 10:26
  SPEAKER_00: But I want to make sure we really explore the why here.
• 10:30
  SPEAKER_00: Why scale it inversely?
• 10:31
  SPEAKER_01: It really comes down to proportional reward versus actual human effort.
• 10:36
  SPEAKER_01: Let's do the math on those examples.
• 10:37
  SPEAKER_00: Okay, let's do it.
• 10:38
  SPEAKER_01: 2.1% of$100 million is$2.1 million.
• 10:42
  SPEAKER_00: Okay.
• 10:43
  SPEAKER_01: 5.5% of$5 million is$275,000.
• 10:47
  SPEAKER_00: Aaron Powell Right.
• 10:48
  SPEAKER_00: So even though the percentage shrinks, the advisor's final paycheck is still nearly 10 times larger on the big deal.
• 10:54
  SPEAKER_00: Exactly.
• 10:55
  SPEAKER_01: Now, does a$100 million deal require 10 times the human effort of a$5 million deal?
• 11:00
  SPEAKER_00: Probably not.
• 11:01
  SPEAKER_01: No, it doesn't.
• 11:02
  SPEAKER_01: Does it require 10 times the phone calls, 10 times the legal draft?
• 11:05
  SPEAKER_01: Usually no.
• 11:07
  SPEAKER_01: It might be twice as complex, or even three times as complex, but not 10.
• 11:11
  SPEAKER_01: Right.
• 11:12
  SPEAKER_01: If the advisor took a flat 5.5% on the$100 million deal, you'd be paying them$5.5 million.
• 11:19
  SPEAKER_01: At that point, the fee becomes entirely disproportionate to the actual labor provided.
• 11:24
  SPEAKER_00: Yeah, that would feel like robbery.
• 11:25
  SPEAKER_01: Trevor Burrus, Jr.: It would.
• 11:26
  SPEAKER_01: The inverse scale brilliantly balances this.
• 11:28
  SPEAKER_01: It incentivizes the advisor to hunt for the absolute highest valuation for your company, because a bigger number still means a bigger payday for them, without bankrupting the seller with an unscalable, unfair percentage.
• 11:40
  SPEAKER_00: I love that.
• 11:41
  SPEAKER_01: It aligns their greed with your success, but caps the greed so it remains logical.
• 11:46
  SPEAKER_00: Exactly.
• 11:47
  SPEAKER_00: So that covers the retainer and the success fee.
• 11:50
  SPEAKER_00: Now let's look at the variables that actually move those baseline percentages up or down.
• 11:54
  SPEAKER_01: Aaron Powell Because they do fluctuate.
• 11:55
  SPEAKER_00: Right.
• 11:56
  SPEAKER_00: Because not all$20 million deals are going to land exactly at that 3.7% average.
• 12:02
  SPEAKER_00: The sources point out that deep sector expertise allows an advisor to charge a massive premium.
• 12:07
  SPEAKER_01: It does.
• 12:08
  SPEAKER_00: But honestly, here's where it gets really interesting.
• 12:11
  SPEAKER_00: If I am already paying nearly a million dollars in fees, why wouldn't I just shop around for a generalist tool, do it for 2%?
• 12:19
  SPEAKER_00: I mean, a contract is a contract, right?
• 12:20
  SPEAKER_01: Aaron Powell That is the most common and often the most fatal error a founder can make.
• 12:25
  SPEAKER_00: Aaron Powell Really?
• 12:26
  SPEAKER_01: Yes, because a contract is just paper.
• 12:28
  SPEAKER_01: What you are actually buying is the Rolodex and the translation skills.
• 12:32
  SPEAKER_00: Aaron Powell What do you mean by translation skills?
• 12:35
  SPEAKER_01: Think about it like real estate.
• 12:36
  SPEAKER_01: Hiring a generalist MA advisor to sell a highly specialized cutting-edge healthcare tech company, it's like hiring a residential real estate agent to sell a commercial skyscraper.
• 12:47
  SPEAKER_00: Oh wow.
• 12:48
  SPEAKER_00: Okay.
• 12:48
  SPEAKER_01: Aaron Ross Powell Sure, the residential agent legally knows how to draft a purchase agreement, but they don't even have the phone numbers of the billionaires and the sovereign wealth funds who actually buy skyscrapers.
• 12:59
  SPEAKER_00: And they don't know the nuances of the building.
• 13:01
  SPEAKER_01: Furthermore, they don't know how to speak their language.
• 13:04
  SPEAKER_00: Ah, so they don't know how to pitch the specific value of a medical tech company.
• 13:09
  SPEAKER_01: Precisely.
• 13:10
  SPEAKER_01: A specialized healthcare MA advisor knows exactly how your specific medical patents fit into the broader market.
• 13:17
  SPEAKER_01: They know exactly which three massive pharmaceutical companies are desperate for your technology right now.
• 13:22
  SPEAKER_00: Aaron Powell Because they live and breathe that specific industry.
• 13:25
  SPEAKER_01: Yes.
• 13:25
  SPEAKER_01: They know how to translate your complex intellectual property into a strategic narrative that commands a premium.
• 13:31
  SPEAKER_00: Aaron Powell So the generalists might just list it and hope for the best.
• 13:34
  SPEAKER_01: Exactly.
• 13:36
  SPEAKER_01: A cheaper generalist might save you one point on the advisory fee, but their lack of a targeted Rolodex might cost you 20 points on the final valuation.
• 13:44
  SPEAKER_00: Aaron Powell Wow.
• 13:44
  SPEAKER_00: Okay.
• 13:45
  SPEAKER_00: That puts it in perspective.
• 13:46
  SPEAKER_01: Aaron Powell You pay a premium for a specialist because their specific knowledge literally pays for itself.
• 13:52
  SPEAKER_00: Aaron Powell Okay.
• 13:53
  SPEAKER_00: So highly specialized expertise drives the advisor's fee up.
• 13:57
  SPEAKER_00: But what drives the fee down?
• 14:00
  SPEAKER_00: Because there is a paradox in the briefing about negotiation power.
• 14:03
  SPEAKER_01: Aaron Powell This is one of my favorite parts.
• 14:05
  SPEAKER_00: Aaron Powell Yeah.
• 14:06
  SPEAKER_00: You would assume that a massive$100 million corporation with a wildly complex structure would inevitably pay the highest possible fees simply because their deal is so difficult to process.
• 14:16
  SPEAKER_01: Right.
• 14:16
  SPEAKER_00: But the reality is often the exact opposite.
• 14:19
  SPEAKER_00: Why do the biggest players get the biggest discounts?
• 14:22
  SPEAKER_01: Aaron Powell This raises an important question about leverage.
• 14:24
  SPEAKER_01: It really comes down to leverage and prestige.
• 14:26
  SPEAKER_00: Okay.
• 14:27
  SPEAKER_01: A large company, especially one with a history of acquiring or selling divisions, has enormous leverage.
• 14:32
  SPEAKER_01: First, they usually have an internal corporate development team.
• 14:36
  SPEAKER_00: Aaron Powell Oh, so they have their own MA guys on staff.
• 14:38
  SPEAKER_01: Exactly.
• 14:39
  SPEAKER_01: That means they can do half of the heavy lifting themselves, preparing the financials, structuring the data rooms, which fundamentally reduces the hours the external advisor has to bill.
• 14:48
  SPEAKER_00: Aaron Powell So they are essentially outsourcing less of the grunt work to the advisor.
• 14:52
  SPEAKER_01: Aaron Powell Exactly.
• 14:53
  SPEAKER_01: But the second and arguably more powerful lever is the resume value.
• 14:58
  SPEAKER_00: Aaron Powell What do you mean by resume value?
• 15:00
  SPEAKER_01: Aaron Powell An MA firm desperately wants a high-profile,$100 million flagship deal on their website.
• 15:06
  SPEAKER_00: Aaron Powell Oh, to show off to other clients.
• 15:08
  SPEAKER_01: Yes.
• 15:08
  SPEAKER_01: It signals to the entire market that they are heavy hitters.
• 15:12
  SPEAKER_01: Because that prestige is so valuable to the advisor's brand, the large company can actually pit multiple top-tier MA firms against each other in a bidding war to lower the fee.
• 15:23
  SPEAKER_00: That is brilliant.
• 15:24
  SPEAKER_01: The seasoned players leverage their own prestige to squeeze the advisor's take.
• 15:28
  SPEAKER_00: Aaron Ross Powell So past success literally subsidizes future transactions.
• 15:33
  SPEAKER_00: That is fascinating.
• 15:35
  SPEAKER_00: Now, knowing these variables is crucial, but let's transition into the actual execution.
• 15:40
  SPEAKER_01: Aaron Powell The real world application.
• 15:42
  SPEAKER_00: Right.
• 15:44
  SPEAKER_00: Our sources today are heavily focused on the Canadian market.
• 15:47
  SPEAKER_00: So picture this.
• 15:48
  SPEAKER_00: You are sitting at the mahogany negotiating table.
• 15:51
  SPEAKER_00: You are reviewing the engagement letter with a Canadian advisor.
• 15:55
  SPEAKER_00: What are these specific landmines you need to look out for?
• 15:59
  SPEAKER_01: Aaron Ross Powell First, you have to lock down the definition of out-of-pocket expenses.
• 16:03
  SPEAKER_01: This is the third component of the invoice we haven't touched on yet.
• 16:06
  SPEAKER_00: Right, the travel and accommodation costs.
• 16:08
  SPEAKER_01: Yes.
• 16:09
  SPEAKER_01: And if you aren't careful, those can spiral completely out of control.
• 16:12
  SPEAKER_00: Aaron Powell Like blank check territory?
• 16:14
  SPEAKER_01: Pretty much.
• 16:15
  SPEAKER_01: You need to define exactly what travel expenses means in writing.
• 16:19
  SPEAKER_01: Does it mean business class flights to London to court international buyers, or does it mean economy?
• 16:24
  SPEAKER_00: Right.
• 16:25
  SPEAKER_01: Does it mean five-star luxury suites?
• 16:27
  SPEAKER_01: You have to cap these expenses or require written pre-approval for anything over a specific dollar amount.
• 16:33
  SPEAKER_00: Aaron Ross Powell Because you do not want your profits eaten up by an advisor's taste for fine dining.
• 16:37
  SPEAKER_01: Aaron Powell Exactly.
• 16:38
  SPEAKER_01: It's just critical thinking.
• 16:40
  SPEAKER_01: But beyond the expenses, there is a very strategic reason the briefing emphasizes partnering with a domestic Canadian advisor rather than just hiring a massive firm out of New York.
• 16:50
  SPEAKER_00: Aaron Powell Which goes back to the specialist argument, right?
• 16:53
  SPEAKER_00: Like, why is localized Canadian expertise so vital?
• 16:57
  SPEAKER_01: Aaron Powell Because the Canadian regulatory environment is filled with highly specific localized tripwires.
• 17:03
  SPEAKER_01: Take the Investment Canada Act or the ICA, for example.
• 17:06
  SPEAKER_00: Aaron Powell Can you explain mechanically what the ICA actually does in the context of a sale?
• 17:11
  SPEAKER_01: Aaron Powell Certainly.
• 17:12
  SPEAKER_01: If you are a Canadian founder selling a mid-sized tech company to a massive American private equity firm, you might think it's just a straightforward cross-border wire transfer.
• 17:21
  SPEAKER_01: Trevor Burrus, Jr.
• 17:22
  SPEAKER_00: Right.
• 17:22
  SPEAKER_00: Just move the money.
• 17:23
  SPEAKER_01: But under the Investment Canada Act, the Canadian government has the authority to step in and review the sale.
• 17:29
  SPEAKER_01: They want to ensure it is of net benefit to Canada.
• 17:32
  SPEAKER_00: Aaron Ross Powell Okay, so they can intervene.
• 17:34
  SPEAKER_01: Yes.
• 17:34
  SPEAKER_01: And increasingly to ensure it doesn't pose a national security risk, especially if you deal in data, AI, or critical minerals.
• 17:41
  SPEAKER_00: Aaron Powell So the government can just freeze the deal.
• 17:43
  SPEAKER_01: Aaron Powell Absolutely.
• 17:45
  SPEAKER_01: They can freeze it for months, demand massive structural changes, or block it entirely.
• 17:49
  SPEAKER_00: Wow.
• 17:50
  SPEAKER_01: And a foreign advisor from New York might not see that tripwire until the deal is already paralyzed.
• 17:56
  SPEAKER_00: Aaron Powell But a Canadian advisor would.
• 17:58
  SPEAKER_01: A local Canadian advisor structures the deal from day one to appease those specific regulators.
• 18:03
  SPEAKER_01: They know exactly how to draft the commitments regarding Canadian job retention or headquarters location to ensure the ICA review passes smoothly.
• 18:11
  SPEAKER_00: Oh, I see.
• 18:12
  SPEAKER_01: A domestic advisor is literally a shield against that localized complexity.
• 18:16
  SPEAKER_00: Aaron Powell That is a phenomenal way to frame it.
• 18:18
  SPEAKER_00: You aren't just paying for a network, you are paying for regulatory foresight.
• 18:22
  SPEAKER_01: Precisely.
• 18:23
  SPEAKER_00: Okay.
• 18:24
  SPEAKER_00: Let's bring all of this together.
• 18:26
  SPEAKER_00: If you are listening to this and mapping out your exit strategy, here is the clear view of the board in 2026.
• 18:33
  SPEAKER_00: MA fees are a three-part harmony.
• 18:35
  SPEAKER_01: A very expensive harmony.
• 18:37
  SPEAKER_00: Yes.
• 18:37
  SPEAKER_00: You have the monthly retainer, which is a sunk cost designed to keep the lights on and keep both parties honest during an 18-month process.
• 18:45
  SPEAKER_01: Right.
• 18:45
  SPEAKER_00: You have the inverse Lehman success fee, which aligns the advisor's greed with your evaluation while protecting you from unscalable percentages.
• 18:53
  SPEAKER_00: And you have the tightly capped out-of-pocket expenses.
• 18:56
  SPEAKER_01: And you have to understand that those baseline structures are constantly being manipulated by the specific variables of your deal.
• 19:02
  SPEAKER_00: Right, the expertise and the leverage.
• 19:04
  SPEAKER_01: You are going to pay a premium for an advisor whose Rolodex perfectly matches your industry, and you are going to use your own internal preparation to negotiate those fees down where possible.
• 19:14
  SPEAKER_00: It is a totally dynamic ecosystem.
• 19:16
  SPEAKER_00: Now, before we wrap up, I really want to remind you to check out the show notes.
• 19:20
  SPEAKER_00: If you are serious about furthering your education on selling a business and understanding the deeper nuances of everything we discussed today, the book we linked is the foundational resource you need.
• 19:31
  SPEAKER_01: It really is.
• 19:32
  SPEAKER_00: Grab a copy, start preparing.
• 19:33
  SPEAKER_00: Again, that link is Amazon.ca slash dp slash b0 GFXWJVXQ.
• 19:41
  SPEAKER_00: But you know, we've spent all this time breaking down the historical context of the Lehman formula.
• 19:48
  SPEAKER_00: And it's based entirely on human effort.
• 19:50
  SPEAKER_00: Trevor Burrus, Jr.
• 19:50
  SPEAKER_01: Right.
• 19:50
  SPEAKER_01: The hours spent on due diligence, the human complexity of managing a data room.
• 19:55
  SPEAKER_01: Exactly.
• 19:55
  SPEAKER_01: Yeah.
• 19:56
  SPEAKER_00: It leaves me with a pretty massive question about the future.
• 20:01
  SPEAKER_00: What happens to this entire fee structure when artificial intelligence actually takes over the heavy lifting?
• 20:09
  SPEAKER_01: It is the existential question for the industry right now.
• 20:11
  SPEAKER_00: Aaron Powell Because it's coming, right?
• 20:13
  SPEAKER_01: Oh, it's already starting.
• 20:14
  SPEAKER_01: If we acknowledge that the Lehman formula scales inversely because massive deals require diminishing returns on human effort, what happens when an AI can execute the financial audit of a complex hundred million dollar company in the exact same three seconds it takes to audit a five million dollar company?
• 20:32
  SPEAKER_00: Aaron Powell Right.
• 20:33
  SPEAKER_00: If the algorithm removes the thousand hours of analyst labor, does the MA advisor become obsolete?
• 20:41
  SPEAKER_00: Or do they still charge you 2.1% just for picking up the phone?
• 20:44
  SPEAKER_01: Aaron Powell My thesis is that they won't become obsolete, but the justification for the fee will pivot entirely.
• 20:50
  SPEAKER_00: Aaron Powell How so?
• 20:51
  SPEAKER_01: Advisors will no longer be able to charge for data processing or standard due diligence.
• 20:56
  SPEAKER_01: They will have to charge purely for emotional intelligence, negotiation tactics, and human strategy.
• 21:02
  SPEAKER_01: Wow.
• 21:02
  SPEAKER_01: The entire value proposition will shift from I can analyze a spreadsheet to I know how to read the tension in the room and push the buyer for an extra$5 million.
• 21:11
  SPEAKER_00: Aaron Powell So the human element becomes the ultimate premium product.
• 21:15
  SPEAKER_01: Exactly.
• 21:16
  SPEAKER_00: That is a fascinating thought to leave on, and definitely something every founder should be watching as the technology evolves.
• 21:22
  SPEAKER_01: The landscape is always shifting.
• 21:24
  SPEAKER_00: It really is.
• 21:25
  SPEAKER_00: We want to sincerely thank the Shawnee Group for providing the incredible data and insights that form the foundation of today's deep dive.
• 21:33
  SPEAKER_01: Fantastic resources.
• 21:34
  SPEAKER_00: If you want to explore more of their resources, read their exclusive articles, or dive into their Canadian exit briefing, you absolutely need to visit their website.
• 21:42
  SPEAKER_00: Just head over to shaughnessy.group.
• 21:45
  SPEAKER_01: Highly recommend it.
• 21:46
  SPEAKER_00: Again, that is shaughnessy.group.
• 21:49
  SPEAKER_00: Thank you to everyone listening for your time, for your curiosity, and for trusting us to help you navigate your journey.
• 21:55
  SPEAKER_00: Until next time.