of private placement. It is generally used in two different ways, either counting each million dollars of value separately, or all at one time. By million dollar amount method (MDA) The MDA method is the original formula, and applies each percentage to its own bracket. For example, if an investor wished to sell $3 million worth of stock, he would pay the broker he used a fee of 5%, or $50,000, on the first million dollars of transaction value, 4% (40,000) of the second million, and 3% (30,000)of the third million, for a total fee of $120,000. On an investment of $50 million, the total fee would be $600,000. The MDA tends to generate the highest fees, and is usually used when the transaction is under 4 million, to generate the most money. By total value amount (TVA) The TVA basically applies the percentage fee that fits the highest dollar value. For example, if an investor wished to sell $3 million worth of stock, he would pay the broker he used a fee of 3% of three million dollars, or $90,000. On an investment of $50 million, the total fee would be 1% of 50 million, or 500,000. By pertinent value amount (PVA) The PVA works exactly like the TVA until the transaction exceeds 4 million. It then charges 2% of the first four million, and 1% of everything beyond that. Variants due to inflation One problem with the Lehman Formula is inflation. A five million dollar deal was more significant when the formula was designed in the 1960s, but today it is considered small by most large banks. However, rather than indexing the formula for inflation, most investment services ended up making adjustments to the formula to provide fee protection for the first few million dollars of transaction value. Double Lehman An occasional variant used in the 1990s was the Double Lehman formula, which doubled the percentages but skipped odd numbers. 10% of the first $1 million, plus 8% of the second $1 million, plus 6% of the third $1 million, plus 4% of the fourth $1 million, plus 2% of everything above $4 million. This resulted in an approximately 2x adjustment to the original formula, vs 6x for inflation. Double Percentage Lehman ("Modern Lehman") A more common variant used by mid-market M&A specialists and business brokers is the Double Percentage Lehman ("Modern Lehman"). Under this variation - not