Can I pay a finder to help me raise capital?

#registeredbrokers #SEC #FINRA


To answer this question you need to ask one follow-up questions: Is the "finder" a registered broker-dealer with the SEC and/or state securities regulators?


The only people who can be compensated for helping raise capital for a business are individuals who have registered as broker-dealers with the SEC, state regulatory agencies and FINRA. There are many consultants, advisors, placement agents and businesses who, for a commission, perform the function of matching investors with businesses seeking capital and are not registered broker-dealers. These individuals and businesses are breaking the law.


There are limited circumstances in which an individual could be a "finder" and not fall within the legal definition of a "broker" or a "dealer." In those limited circumstances, such an individual would be able to provide assistance in raising capital as long as their compensation is not a commission or a transaction-based fee.


If you are a "finder" or a business owner looking for capital and would like more information on this topic, please submit a question via the link below.


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