Lehman Formula
"The Lehman Formula is a fee structure charged by investment bankers and some other intermediaries for originating and/or structuring a merger or acquisition transaction. It is named after Lehman Brothers who popularized the framework. The fee percentages are inversely proportional to the transaction size, broken down as follows:
-5% of the first million dollars of total consideration (cash, stock, etc.)
-4% of the second million
-3% of the third million
-2% of the fourth million
-1% of everything thereafter"
Read more in this Buyout Blog post. Technorati Tags: business, management, entrepreneurship, startup, legal
