Business Broker vs. M&A Advisor: Which Is Right for Your Software Company Exit?

When a founder begins to explore the sale of their software or technology company, one of the first strategic decisions is choosing the right type of intermediary. Should you work with a business broker or an M&A advisor?

While both professionals assist in selling companies, the differences in their approach, expertise, and deal execution capabilities can significantly impact your outcome — especially in the mid-market and lower mid-market tech space. Understanding these distinctions is essential for maximizing valuation, minimizing risk, and ensuring a smooth transaction process.

Defining the Roles: Business Broker vs. M&A Advisor

Business brokers typically focus on smaller, often local, main street businesses — think retail shops, small service firms, or owner-operated companies with under $5 million in revenue. Their process is often standardized, with a focus on listing the business, finding a buyer, and facilitating a relatively straightforward transaction.

M&A advisors, by contrast, specialize in more complex transactions, often involving companies with $5 million to $100 million+ in enterprise value. These deals may include strategic buyers, private equity firms, or cross-border acquirers. M&A advisors provide a more tailored, strategic, and data-driven approach to valuation, positioning, and negotiation.

For software and technology companies — especially those with recurring revenue models, intellectual property, or growth potential — the distinction is not just academic. It can materially affect the outcome of your exit.

Key Differences and Benefits

1. Valuation Expertise and Strategic Positioning

Business brokers often rely on rule-of-thumb valuation multiples or seller’s discretionary earnings (SDE) to price a business. While this may suffice for a local HVAC company, it falls short for SaaS or cloud-based businesses where metrics like ARR, churn, CAC, and LTV drive value.

M&A advisors, particularly those focused on tech, bring a more sophisticated valuation framework. Firms like iMerge analyze financial performance, growth trajectory, market positioning, and buyer synergies to craft a compelling narrative. This often results in higher valuations and more competitive bidding environments.

As discussed in SaaS Valuation Multiples: A Guide for Investors and Entrepreneurs, understanding how buyers value recurring revenue, gross margin, and retention is critical to positioning your company for a premium exit.

2. Buyer Network and Deal Access

Business brokers typically market listings on public platforms like BizBuySell or through local networks. This approach may attract individual buyers or small investors but rarely reaches institutional or strategic acquirers.

M&A advisors maintain curated relationships with private equity firms, corporate development teams, and family offices. They often run targeted outreach campaigns, leveraging proprietary databases and industry connections to identify the right buyers — not just any buyer.

For example, a founder of a $15M ARR vertical SaaS company may receive inbound interest from a competitor. But an M&A advisor can surface multiple strategic and financial buyers, creating competitive tension and improving deal terms.

3. Deal Structuring and Negotiation

Business brokers may facilitate basic asset or stock sales, but they often lack the technical depth to navigate complex deal structures — such as earn-outs, equity rollovers, or working capital adjustments.

M&A advisors, on the other hand, are deeply involved in structuring the transaction to align with the seller’s goals. They anticipate buyer tactics, negotiate on your behalf, and coordinate with legal and tax advisors to optimize outcomes.

As outlined in Asset versus Stock Sale, the structure of the deal can have significant tax and legal implications. A seasoned M&A advisor ensures these nuances are addressed early in the process.

4. Due Diligence and Process Management

Due diligence is where deals are won or lost. Business brokers may not have the resources or experience to manage the rigorous diligence process that institutional buyers require.

M&A advisors prepare sellers in advance — often conducting pre-LOI diligence to identify and resolve red flags. They manage the data room, coordinate with accountants and attorneys, and keep the process on track.

For software companies, this includes preparing materials like a Due Diligence Checklist for Software (SaaS) Companies, quality of earnings reports, and customer contract reviews. These steps are critical to maintaining deal momentum and avoiding last-minute surprises.

5. Transaction Size and Complexity

Business brokers are best suited for deals under $2 million in enterprise value. Their fee structures and processes are optimized for smaller, less complex transactions.

M&A advisors typically work on deals ranging from $5 million to $100 million+, where the stakes are higher and the buyer pool more sophisticated. They bring the financial modeling, industry insight, and negotiation leverage required to close these deals successfully.

When a Business Broker Might Be Appropriate

To be fair, there are scenarios where a business broker may be the right fit:

• You’re selling a small, owner-operated business with limited growth potential
• The buyer is likely to be an individual or local entrepreneur
• You’re seeking a quick, low-cost transaction with minimal complexity

But for founders of software, SaaS, or tech-enabled businesses — especially those with recurring revenue, IP, or strategic value — an M&A advisor is almost always the better choice.

Choosing the Right Partner

Ultimately, the decision comes down to the nature of your business, your goals for the exit, and the complexity of the transaction. If you’re unsure, consider the following questions:

• Is your company generating $5M+ in revenue or $1M+ in EBITDA?
• Do you have recurring revenue, proprietary technology, or a defensible market position?
• Are you open to private equity or strategic buyers?
• Do you want to maximize valuation and optimize deal terms?

If the answer to any of these is yes, an M&A advisor — particularly one with deep experience in software and technology — is likely the right partner.

Firms like iMerge specialize in helping founders navigate the full lifecycle of a transaction, from valuation and positioning to buyer outreach, negotiation, and closing. Their sector focus and deal experience can make a material difference in both outcome and experience.

Conclusion

While business brokers and M&A advisors both facilitate company sales, they serve very different markets and bring different levels of expertise. For software and technology founders seeking a strategic exit, the benefits of working with an M&A advisor — from valuation to buyer access to deal execution — are clear and compelling.

Founders navigating valuation or deal structuring decisions can benefit from iMerge’s experience in software and tech exits — reach out for guidance tailored to your situation.