M&A Broker Exemption Disclosure
This page provides important regulatory disclosures regarding the operations of Second Chair Advisory LLC (“Second Chair Advisory”) and the Exit Lab platform network.
About Second Chair Advisory LLC
Second Chair Advisory LLC is a technology and product company that builds, owns, and operates the Exit Lab platform network (including exitlab.com, exitlabhvac.com, exitlabhomecare.com, and associated subdomains). It also conducts some buy-side acquisition search. The Platform is an educational content, valuation-scanner, and referral service. Second Chair Advisory LLC is not a broker-dealer, an M&A broker, a registered investment advisor, or an advisory firm, and it does not provide advisory, brokerage, valuation, investment, legal, or tax advice to business owners. Second Chair Advisory LLC is a software and product company that may refer interested owners to affiliated or partner firms.
This disclosure page exists because the Platform may refer interested business owners to an affiliated investment bank or to vetted M&A partner firms, and because the regulatory framework governing those firms is relevant to users of the Platform.
The M&A Broker Exemption: Why It Matters to You
The affiliated and partner firms to which Exit Lab may refer owners may include M&A brokers who operate under the M&A Broker Exemption established by Section 15(b)(13) of the Securities Exchange Act of 1934, as amended by the Consolidated Appropriations Act of 2023 (effective March 29, 2023). [1]
This federal exemption permits qualifying M&A brokers to facilitate the transfer of ownership of eligible privately held companies without registering as broker-dealers with the U.S. Securities and Exchange Commission (“SEC”), provided certain conditions are met. [2]
We provide this disclosure so that business owners who use the Platform understand the regulatory context in which the affiliated and partner firms they may be referred to operate.
Role of Second Chair Advisory LLC
Second Chair Advisory LLC’s role is limited to the following:
Operating the Platform Infrastructure. Second Chair Advisory LLC builds, maintains, and operates the technology infrastructure that powers the Exit Lab platform network, including content management, scanner tools, report generation, email delivery, and lead routing systems.
Generating and Referring Leads. The Platform generates interest through organic content marketing, valuation scanners, and educational resources. When a business owner completes the scanner and consents to data sharing, their information may be referred to an affiliated lower-middle-market investment bank and/or to select vetted M&A partner firms. These recipient firms may be affiliated with, owned by, or under common ownership with Second Chair Advisory LLC. Second Chair Advisory LLC may receive referral fees or other compensation in connection with these referrals.
Providing Educational Resources. The Platform provides valuation scanners, exit readiness assessments, financial calculators, industry guides, and related educational content. These tools generate educational estimates only and do not constitute professional valuations, appraisals, or opinions of value.
Facilitating Referrals. When a business owner consents to be contacted, Second Chair Advisory LLC may refer the owner to an affiliated investment bank or a vetted M&A partner firm. Second Chair Advisory LLC does not participate in, manage, or direct any subsequent advisory engagement or transaction. The owner controls the timeline and the decision and may decline at any time.
What Second Chair Advisory LLC Does Not Do
To ensure clarity regarding our role and regulatory position, Second Chair Advisory LLC does not:
| Activity | Status |
|---|---|
| Act as an M&A broker or facilitate the sale or transfer of any business | Not performed |
| Receive, hold, transmit, or have custody of funds or securities exchanged in any transaction | Not performed |
| Provide financing related to the transfer of ownership of any business | Not performed |
| Bind any party to a transfer of ownership | Not performed |
| Act as a registered broker-dealer | Not applicable |
| Provide investment advice or act as a registered investment advisor | Not performed |
| Negotiate transaction terms on behalf of any party | Not performed |
| Represent either buyer or seller in any transaction | Not performed |
| Receive transaction-based compensation, success fees, or commissions tied to the closing of any deal | Not performed |
| Facilitate transactions involving publicly traded companies | Not performed |
Compensation Disclosure
Second Chair Advisory LLC receives revenue through the following channels:
(a) Referral Fees. Second Chair Advisory LLC may receive referral fees or other compensation from affiliated or partner firms, including firms under common ownership with Second Chair Advisory LLC, in connection with owners who are referred through the Platform and choose to engage them.
(b) Platform Fees. Fees for premium assessments, enhanced reports, or other paid services offered through the Platform.
(c) Data Licensing. Revenue from the licensing of anonymized, aggregate data for market research and industry reporting purposes.
Second Chair Advisory LLC does not act as an M&A broker and does not itself receive transaction-based compensation, success fees, or commissions tied to the closing of any M&A transaction. Any referral fees received by Second Chair Advisory LLC are for the referral of an interested owner, not for brokerage services.
Affiliated and Partner Firms
The affiliated investment bank and partner firms to which owners may be referred through the Exit Lab platform maintain their own regulatory compliance, licensing, and professional obligations. Some of these firms may be affiliated with, owned by, or under common ownership with Second Chair Advisory LLC. Second Chair Advisory LLC does not, through the Platform, supervise the professional brokerage activities of any firm.
Affiliated and partner firms that engage in M&A brokerage activities are independently responsible for their own compliance with applicable federal and state securities laws, including but not limited to:
(a) The M&A Broker Exemption under Section 15(b)(13) of the Securities Exchange Act of 1934, if applicable to their activities.
(b) State broker-dealer registration requirements (“blue sky” laws) in each state where they operate.
(c) All applicable anti-fraud provisions of the federal securities acts, including Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
(d) The Telephone Consumer Protection Act (“TCPA”) and CAN-SPAM Act with respect to their communications with leads received through the Platform.
(e) All applicable state consumer protection and privacy laws, including the California Consumer Privacy Act as amended by the California Privacy Rights Act (“CCPA/CPRA”).
A referral facilitated by the Exit Lab platform does not constitute an endorsement, recommendation, or guarantee of any affiliated or partner firm’s regulatory status, qualifications, or competence. Business owners are responsible for conducting their own due diligence before engaging any firm.
Eligible Privately Held Companies
For reference, the M&A Broker Exemption applies to transactions involving “eligible privately held companies,” defined under the statute as companies that: [3]
(a) Do not have any class of securities registered, or required to be registered, under Section 12 of the Securities Exchange Act of 1934, and are not subject to reporting requirements under Section 15(d) of the Exchange Act.
(b) In the fiscal year ending immediately before the fiscal year in which the M&A broker is engaged, had either earnings before interest, taxes, and amortization (“EBITA”) of less than $25 million, or gross revenues of less than $250 million. These thresholds are subject to adjustment every five years for inflation.
The Exit Lab platform is designed to serve business owners who own privately held companies. The Platform does not facilitate transactions involving publicly traded companies.
Important Limitations
State Securities Laws. The federal M&A Broker Exemption does not preempt state securities laws. M&A brokers, including affiliated and partner firms to which owners are referred through the Platform, may be subject to additional registration or licensing requirements under the securities laws of individual states. [4]
Anti-Fraud Provisions. The anti-fraud provisions of the federal securities acts, including Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, continue to apply to all parties, including M&A brokers operating under the exemption.
No Legal Advice. This disclosure is provided for informational purposes only and does not constitute legal advice. Business owners and advisory firms should consult their own legal counsel regarding the applicability of the M&A Broker Exemption and compliance with applicable securities laws.
Platform Limitation. Second Chair Advisory LLC does not verify, audit, or guarantee the regulatory status of any affiliated or partner firm. It is the responsibility of each such firm to maintain its own regulatory compliance.
Contact Information
If you have questions about this disclosure or the regulatory framework under which Second Chair Advisory LLC operates, contact us at:
Second Chair Advisory LLC
Email: privacy@exitlab.com
Phone: (248) 505-8022
Website: 2ndchairadvisory.com
References
[1] Consolidated Appropriations Act, 2023, Pub. L. No. 117-328, Section 15(b)(13) of the Securities Exchange Act of 1934.
[2] Phelps Dunbar LLP, “Who Qualifies Under the New Exemption for M&A Brokers?” (March 21, 2023). phelps.com
[3] Foster Swift Collins & Smith PC, “New Federal Registration Exemption for M&A Brokers of Eligible Privately Held Companies” (October 4, 2023). fosterswift.com
[4] Finalis Inc., “Spotlight on the New M&A Broker Exemption” (February 9, 2026). finalis.com
This M&A Broker Exemption Disclosure applies to all websites and services operated under the Exit Lab brand by Second Chair Advisory LLC, including exitlab.com, exitlabhvac.com, exitlabhomecare.com, and all associated subdomains.