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Business Broker

Definition

An intermediary who facilitates the sale of a business, historically paid by the buyer rather than the seller. Business brokers typically operate with less formality than investment banks — often without exclusivity, showing deals to a small number of buyers (sometimes just one) rather than running a broad auction process.

Context

In Ep. 21, Glenn Oken describes how in 1989, "virtually all deal flow, almost all of the deals that we closed were coming from business brokers as opposed to investment bankers." The broker model was built on trust and certainty of close: brokers would tell sellers "you're not going to have to pay my fee — the buyer will pay" and would find 1-3 trusted buyers rather than running a broad process. Glenn notes that today, buy-side brokerage is "still there, thank goodness, but it is the minority by meaningful measure" as sell-side investment banking has become dominant.