If you`re thinking about your big bank brokerage account and you`re thinking about investment advisors and similar roles in them, it`s usually a licensed broker-dealer. Just because you or a discoverer is trying to raise money for your small start-up business and not sell Microsoft shares doesn`t mean the broker`s rules aren`t always at stake. As an issuer (the company that sells the securities) and its staff (CEO, CFO, etc.), it is likely that you are not in the business of buying and selling securities and that you do not need to be registered or authorized to collect money solely for your business; However, the Finder is often subject to these obligations. Suppose the person doesn`t pass. If you don`t have a relationship, relationship or prior experience with that proven person, don`t rely on the future of your business on someone who will likely work on 100 other companies through research fee agreements. You are for their quintessence, as you should be with your business. Keep working on other ways to increase the money yourself. I have worked in the trenches and I can tell you that if your business needs money to survive and grow, you tend to forget the legal implications and just want that person just who will give you the money. I`m not telling you to give up the law and do what you want, but since you know the risks, every exec startup has to make the decisions to move forward or not.
I worked in companies where he paid equity and cash and signed many research fee agreements generally from 1% to 10%, sometimes more. It was paid in cash, equity, options or combination. In some cases, search expenses have even been disclosed in public filings with the SEC and verified footnotes. The SEC, SIPC or another regulator did not come and slammed the door and were all handcuffed. That doesn`t mean you couldn`t be arrested by the SEC and be charged with some form of fraud or other crimes if your discoverer out there war-superhyping your business. There are risks associated with these transactions, but as a general rule, this would take the form of actions brought by disgruntled shareholders who have invested by these researchers. A common sanction sought by the SEC against issuers who use unregistered discoverers is to prevent the issuer from making future offers of Regulation D. This could, of course, have deadly consequences for a start-up dependent on private capital. With so much at stake, it`s not a good idea to sign a random Finder arrangement that you pull out of the Internet and don`t really understand.