Comments on: Should Your Startup Hire a Finder? http://thestartuplawyer.com/startup-issues/should-your-startup-hire-a-finder-or-broker Startup Law, Incorporation, Convertible Notes, Preferred Stock, Stock Options, Venture Capital Fri, 12 Mar 2010 18:59:08 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: larry rose http://thestartuplawyer.com/startup-issues/should-your-startup-hire-a-finder-or-broker/comment-page-1#comment-405 larry rose Fri, 11 Dec 2009 15:25:09 +0000 http://www.thestartuplawyer.com/?p=1303#comment-405 I've invested in few start ups with a "finder" who gets a fee from these companies. I did a search on the finder and he is not licensed. I'd like to file a complaint and any advice on where to start would be appreciated. I’ve invested in few start ups with a “finder” who gets a fee from these companies. I did a search on the finder and he is not licensed. I’d like to file a complaint and any advice on where to start would be appreciated.

]]> By: Michael N. Brette,J.D. http://thestartuplawyer.com/startup-issues/should-your-startup-hire-a-finder-or-broker/comment-page-1#comment-390 Michael N. Brette,J.D. Sun, 01 Nov 2009 18:51:31 +0000 http://www.thestartuplawyer.com/?p=1303#comment-390 Only licensed broker/dealers can raise capital on a commission or success-based compensation fee. If you hire an unlicensed person to "find" capital for your business and pay him a commission or other success-based fee both of you are in violation of state and federal security laws and face civil and criminal penalities. The fact that some people do this and get away with it does not make it legal. It just they have not been caught. Why do you think they have security laws? Only licensed broker/dealers can raise capital on a commission or success-based compensation fee. If you hire an unlicensed person to “find” capital for your business and pay him a commission or other success-based fee both of you are in violation of state and federal security laws and face civil and criminal penalities. The fact that some people do this and get away with it does not make it legal. It just they have not been caught. Why do you think they have security laws?

]]> By: Tyler Hawkes http://thestartuplawyer.com/startup-issues/should-your-startup-hire-a-finder-or-broker/comment-page-1#comment-389 Tyler Hawkes Fri, 09 Oct 2009 17:12:02 +0000 http://www.thestartuplawyer.com/?p=1303#comment-389 One other comment, that many will find obvious, but has nonetheless affected at least one entrepreneur I know, don't pay a "retainer" to anyone that claims to have found money. This is a common scam that people use to take advantage of optimistic entrepreneurs. Make sure that they're paid on the back end, after the deal goes through, and make sure to get a good securities lawyer to structure everything properly. One other comment, that many will find obvious, but has nonetheless affected at least one entrepreneur I know, don’t pay a “retainer” to anyone that claims to have found money. This is a common scam that people use to take advantage of optimistic entrepreneurs. Make sure that they’re paid on the back end, after the deal goes through, and make sure to get a good securities lawyer to structure everything properly.

]]> By: Michael N. Brette,J.D. http://thestartuplawyer.com/startup-issues/should-your-startup-hire-a-finder-or-broker/comment-page-1#comment-388 Michael N. Brette,J.D. Thu, 08 Oct 2009 23:05:11 +0000 http://www.thestartuplawyer.com/?p=1303#comment-388 Raising capital should only be done with the assistance of professionals who have spent years developing relationships with accredited investors. Investors do not invest with strangers or in deals sent to them unsolicited or posted on a website. They invest in deals that have been referred to them by their trusted advisors. VC firms receive 2,000 business plans per year. They look at 10 and fund 2. The 2 they fund are usually referred to them by attorneys, CPA's or financial consultants their have worked with in the past. You do the math at your chances of successfully raising capital without professional introductions. Raising capital should only be done with the assistance of professionals who have spent years developing relationships with accredited investors. Investors do not invest with strangers or in deals sent to them unsolicited or posted on a website. They invest in deals that have been referred to them by their trusted advisors.

VC firms receive 2,000 business plans per year. They look at 10 and fund 2. The 2 they fund are usually referred to them by attorneys, CPA’s or financial consultants their have worked with in the past. You do the math at your chances of successfully raising capital without professional introductions.

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