Investment Banking Fees

 Maybe I'm just on some kind of Wall Street kick today. Fabrice Gringa's candid interview on Venture Voice gave me a singular respect for a French guy. Since he's only one French guy I can keep my universal feelings for certain aspects of the French intact. But Fabrice seems to be OK. That said, he has posted on the recient sales of tech companys on Ebay where Ebay is acting as a defacto investment bank. Below is his list of the fees you can expect from Wall Street. It certainly makes Ebay look attractive.

From Fabrice Gringa's blog: Investment Banking Fees

Aggregate value of transaction – Aggregate fee as a % of the transaction

$20 billion – 0.150%
$15 billion – 0.180%
$12.5 billion – 0.200%
$10 billion – 0.230%
$9 billion – 0.240%
$8 billion – 0.250%
$7.5 billion – 0.265%
$7 billion – 0.275%
$6 billion – 0.300%
$5 billion – 0.320%
$4 billion – 0.360%
$3 billion – 0.400%
$2 billion – 0.450%
$1 billion – 0.600%
$900 million – 0.625%
$800 million – 0.650%
$700 million – 0.700%
$600 million – 0.700%
$500 million – 0.800%
$400 million – 0.900%
$300 million – 1.000%
$200 million – 1.200%
$100 million – 1.500%
$50 million – 2.000%

As I mentioned before, those are retail prices so you might be able to shave a bit from those. Also, at lower price points and/or in deals that are less likely to happen you likely to have a retainer (say $50k) and a minimum transaction fee (say $750k).

Side note: IPO fees are very different. For IPOs where the market cap is below $400 million the bankers take 7% of the proceeds split between the book runner and the co-managers.