Finders Keepers - Commissioned based Fees … Weepers
Get Paid 💰💸🤑 to bring in Capital? Maybe….🤷♂️🤷♀️
Let’s break it down! 👇
Tier I Finders
Services Allowed:
🔗 Introduction Only: They can provide a list of potential investors and make introductions but can’t engage further.
🚫 No Transaction Participation: No involvement in discussions, negotiations, or advice on investment terms.
🙅♂️ No Further Contact: After the introduction, they cannot contact investors about the investment.
Payment Structure:
💰 Fixed Compensation: They receive a fixed fee not tied to the investment’s outcome.
🚫 Non-Transaction Based: No transaction-based compensation, keeping them out of broker-dealer classification.
Tier II Finders
Services Allowed:
🔍 Introduction and Solicitation: Can actively solicit and contact potential investors, distribute issuer info, and discuss the issuer (but no investment advice).
🚫 No Investment Advice: Cannot advise on investment merits or recommend securities purchases.
💵 No Handling of Funds: Cannot handle funds or securities in transactions.
Payment Structure:
💸 Transaction-Based Compensation: Allowed to receive compensation based on transaction success, such as a percentage of funds raised.
📜 Disclosure Requirements: Must disclose their role, compensation nature, and conflicts of interest to investors, who must acknowledge this in writing.
Additional Conditions for Both Tiers
🏢 Issuers: Only work with non-public companies.
💼 Accredited Investors: Can solicit only accredited investors.
📜 Transaction Scope: Must comply with private offering exemptions under Regulation D.
Prohibited Activities:
🚫 No Advice or Recommendations: Cannot provide investment advice.
🚫 No Authority: No authority to bind issuers or investors.
🚫 No Handling of Securities: Cannot handle customer funds or securities.
Compliance and Regulatory Oversight
📚 Record-Keeping: Must keep accurate records of activities and communications.
✔️ Exemptive Order Conditions: Must comply with SEC’s exemptive order conditions to be exempt from broker-dealer registration.
