When a founder is choosing the advisor who will sell the company they spent decades building, the reference call is the single cheapest piece of diligence available to them, and it is the one they most often waste. They ask the advisor for a few names, the advisor supplies three founders who had good outcomes, the calls last fifteen minutes each, and every one of them confirms the advisor is terrific. The founder hangs up reassured and learns nothing, because they asked questions that only ever produce one answer.
A reference an advisor volunteers is a curated reference. That is not a criticism of advisors; anyone would do the same. The names you are handed are the clients who closed well and liked the person. The useful information is not whether those founders were happy. Of course they were happy. The useful information is what the process actually felt like from the inside, what went wrong and how the advisor handled it, and whether the advisor told them things they did not want to hear at the moments that mattered. You have to ask for those things directly, because a satisfied reference will not offer them unprompted.
The reason this matters so much is that the advisor's real value shows up in the second half of the deal, not the first. Signing a new client and running a polished marketing process is the part every advisor can do. The difference between a good advisor and an expensive one appears after the letter of intent, when a buyer surfaces a working capital gap or a concentration question and tries to move the price. In our own review of 89 lower-middle-market transactions across late 2025 and early 2026, post-LOI price adjustments occurred in 68 percent of deals, with a median compression of 9.8 percent of the original LOI value (https://dx.doi.org/10.2139/ssrn.6515478). Whether your advisor earns their fee is largely decided in that window. So your reference questions should be aimed squarely at it.
Start by asking the reference to walk you through the hardest moment of their deal. Every real transaction has one: a re-trade attempt, a buyer who went quiet for three weeks, a diligence finding that threatened to blow up the price, a lender who pulled back at the eleventh hour. Ask what it was, and then ask what the advisor actually did. A founder who cannot name a hard moment either had a freakishly clean deal or was not paying attention. A founder who names one and then describes exactly how the advisor steadied the process is giving you the most valuable data point in the entire call.
Then ask the question founders almost never ask: what did the advisor tell you that you did not want to hear? The best advisors deliver bad news early and plainly. They tell a founder their add-backs will not survive a quality of earnings review, that their customer concentration will cap the multiple, that the number in their head is not the number the market will pay. An advisor whose references cannot recall a single uncomfortable truth is an advisor who manages clients by telling them what they want to hear, and that habit becomes very expensive at the negotiating table.
Ask about the gap between the letter of intent and the close. What was the headline number at LOI, and what actually landed in the founder's account at close? You are not entitled to exact figures and many founders will not share them, but most will tell you the direction and rough magnitude. If a reference says the price held firm from LOI to close, that tells you something real about how the advisor protected the deal. If every reference describes a meaningful drop between signing and closing, that pattern is worth more than any pitch. The whole point of the engagement is to close near the number you were promised.
Ask who actually did the work. In many firms the senior partner wins the business and a junior team runs the deal. That is not automatically bad, but you should know it going in, and a reference is the honest place to find out. Ask the reference who they called when there was a problem at nine on a Sunday night, and whether that person was the same one who pitched them. The answer tells you what your own experience will look like once the engagement letter is signed.
Two structural moves make these calls far more useful. First, ask each reference at the end of the call for one more name, ideally someone whose deal did not go perfectly. References beget references, and the second-degree names you reach this way were not curated for you. Second, do not confine yourself to the list. A founder who has sold in your sector can usually find, through their own network or a quick search of closed transactions, someone the advisor worked with who is not on the approved sheet. One off-list conversation is often worth more than three from the list.
The reference call also pairs with the rest of the diligence a founder should do before signing. The names an advisor gives you should line up with the buyers they claim to reach and the sectors they claim to know; we wrote about testing that in how to judge an advisor's buyer list before you sign. And the incentives that will govern the relationship live in the fee terms, which is why the reference conversation should be read alongside a careful look at the anatomy of the engagement letter. References tell you how the advisor behaves; the engagement letter tells you how they are paid to behave. You want both.
What you are really trying to learn from a reference call is not whether an advisor is good. Almost every advisor is good at the part they show you. You are trying to learn how they behave when a deal is under stress, whether they tell founders the truth before it becomes an emergency, and whether the price a client signed is the price they closed. Those answers are available for the cost of an hour of phone calls, and they are the closest thing a founder gets to seeing the advisor at work before hiring them. Ask the questions that a happy reference would never volunteer, and the hour will tell you more than any pitch meeting could.