89 N.C. L. Rev. Addendum 16 (2011)
"Mergers and acquisitions" is an often misunderstood and perhaps intimidating field encompassing both complex transactional law issues, as well as specialized business practices. Since the decade of the 1980s and the birth of the hostile takeover, business combinations have become more frequent and involve increasingly large capital expenditures. So numerous have mergers and acquisition transactions become, popular culture has embraced their drama in both film and novel. While the volume of mergers and acquisitions is increasing at a rapid pace, the Securities and Exchange Commission has lagged behind, failing to put in place proper regulatory reform that would provide freedom for small businesses to capitalize upon business combinations.
While investment bankers, registered as broker-dealers under the Securities Exchange Act of 1934, are often used by larger corporations seeking to coordinate a business combination, smaller businesses often "fly below the radar." Smaller corporations planning to purchase a business typically use informal channels to find companies interested in selling. These avenues often include meetings between senior management, attorneys, financial advisers, and third party consultants, or "finders."
A particular subset of these "finders" is made up of "business brokers," who "attempt to initiate or arrange transactions between potential buyers and sellers of a business." The SEC has implicitly recognized that some business broker activities fall outside of the intent and purpose of the '34 Act, and thus a de facto exemption currently exists. Given a niche, these business brokers could provide critical merger assistance to those small businesses that lack the resources necessary to attract and retain an investment bank.