What is Success Fee ?
A Success Fee is a contingent payment made to a financial advisor, consultant, investment banker, or intermediary only if a specific transaction or project outcome is successfully achieved . It’s a performance-based compensation model widely used in financial proposals, consulting projects, mergers & acquisitions, and fundraising activities. 🔍 Key Features of a Success Fee: Contingent on Results : The fee is paid only if the agreed-upon outcome is achieved —e.g., closing a deal, raising funds, or meeting performance targets. Performance-Based : It aligns the interests of the service provider with the client, incentivizing optimal results. Common Use Cases : Mergers & Acquisitions (M&A) : A percentage of the deal value (e.g., 1–5%) Fundraising (VC/PE) : Paid when capital is successfully raised Debt Syndication : Paid after successful loan disbursement. Restructuring/IBC : Paid upon ...