Crowdfunding / syndication Partnering with a capital raiser and Fee structure

Member since 2019 · 72 posts · 21 votes

These 2 question is for commercial investors and syndicators -

1. where do you look for capital raisers? If I do a search on LinkedIn, what titles should I look for? I've seen things like "I help people invest in real estate" for example. what should i search for? equity brokers? Syndicators?

The couple that ive spoken to have different fee / compensation structures. some just want %3 of whatever they raise. ive spoken to a couple that offer a but more than just raising capital and they want to do a co-GP or JV. Id love to hear what some of you offer or have done in the past.

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Freddie Williams

Rental Property Investor · Norfolk, VA · Member since 2016 · 101 posts · 29 votes

@Jay Ben very good questions.

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
Quote from @Jay Ben:

These 2 question is for commercial investors and syndicators -
1. where do you look for capital raisers? If I do a search on LinkedIn, what titles should I look for? I've seen things like "I help people invest in real estate" for example. what should i search for? equity brokers? Syndicators?
The couple that ive spoken to have different fee / compensation structures. some just want %3 of whatever they raise. ive spoken to a couple that offer a but more than just raising capital and they want to do a co-GP or JV. Id love to hear what some of you offer or have done in the past.

So some things to be very careful with:
1. Capital Raisers must be licensed by FINRA as a broker-dealer. If they are not, and you have an investor complaint, this could lead to some serious fines.
2. Capital raisers who are broker dealers will want 8-10%+ for first time investors
The way around this is to make them an equity partner of the company but as an equity partner their primary source of compensation cannot be from commissions.

Strongly recommend you talk to a securities attorney.
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Brock Mogensen
Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
3y
Generally you will want to bring the "capital raiser" in as a GP. They do need to be actively in involved in the deal to remain in regulation.
Plenty of people out there with access to capital that are looking for a "deal finder".
Just need to dial in your approach to these people to get them on board with working with you.
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Jay Ben
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Member since 2019 · 72 posts · 21 votes
3y
Quote from @Chris Seveney:

Quote from @Jay Ben:

These 2 question is for commercial investors and syndicators -

1. where do you look for capital raisers? If I do a search on LinkedIn, what titles should I look for? I've seen things like "I help people invest in real estate" for example. what should i search for? equity brokers? Syndicators?

The couple that ive spoken to have different fee / compensation structures. some just want %3 of whatever they raise. ive spoken to a couple that offer a but more than just raising capital and they want to do a co-GP or JV. Id love to hear what some of you offer or have done in the past.

So some things to be very careful with:
1. Capital Raisers must be licensed by FINRA as a broker-dealer. If they are not, and you have an investor complaint, this could lead to some serious fines.
2. Capital raisers who are broker dealers will want 8-10%+ for first time investors
The way around this is to make them an equity partner of the company but as an equity partner their primary source of compensation cannot be from commissions.

Strongly recommend you talk to a securities attorney.
I will do that, thanks Chris. Is there a directory for FINRA licenced broker-dealers? Whats the best way to search for them?

And is a FINRA license the only one or would they need a series 63 or series 82 or anything else?
Have you worked with any before? if so; Do you have a breakdown of fee structure with a broker dealer you can possibly share?
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Jay Ben
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Member since 2019 · 72 posts · 21 votes
3y
Quote from @Brock Mogensen:

Generally you will want to bring the "capital raiser" in as a GP. They do need to be actively in involved in the deal to remain in regulation.
Plenty of people out there with access to capital that are looking for a "deal finder".
Just need to dial in your approach to these people to get them on board with working with you.

What are the most common titles for capital raisers? I normally search equity broker.
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Jay Ben
Finra has a site to search, most broker dealers will want you to have $10M raised at a min. Because most of their investors will cut bigger checks and they don’t want to be a large portion of the deal.
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Jay Ben
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Member since 2019 · 72 posts · 21 votes
3y
Quote from @Chris Seveney:

@Jay Ben
Finra has a site to search, most broker dealers will want you to have $10M raised at a min. Because most of their investors will cut bigger checks and they don’t want to be a large portion of the deal.

found it thanks! ok so bear with me, so you are saying that in order to have a FINRA licensed broker-dealer to raise money for you, You'd typically need to already have already raised at least about $10 Mil for that particular deal?
So when i speak to people who raise capital for investors or fund managers who are open to doing a fund to fund would they need to have a FINRA license to stay in compliance?
What about the investors who want to raise $3-5m total for a $10m deal, Sounds like thats too small for them if they want to cut bigger checks
would you be open to chatting more in private?
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Brock Mogensen
Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
3y
Quote from @Jay Ben:

Quote from @Brock Mogensen:

Generally you will want to bring the "capital raiser" in as a GP. They do need to be actively in involved in the deal to remain in regulation.

Plenty of people out there with access to capital that are looking for a "deal finder".

Just need to dial in your approach to these people to get them on board with working with you.

What are the most common titles for capital raisers? I normally search equity broker.
You might be better off searching for people on BP or FB groups..
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Freddie Williams
Rental Property Investor · Norfolk, VA · Member since 2016 · 101 posts · 29 votes
3y
@Jay Ben very good questions.
3 Reply
Jay Ben
Vendor · Beverly Hills, CA · Member since 2015 · 12 posts · 2 votes
3y
Quote from @Brock Mogensen:

Quote from @Jay Ben:

Quote from @Brock Mogensen:

Generally you will want to bring the "capital raiser" in as a GP. They do need to be actively in involved in the deal to remain in regulation.

Plenty of people out there with access to capital that are looking for a "deal finder".

Just need to dial in your approach to these people to get them on board with working with you.

What are the most common titles for capital raisers? I normally search equity broker.

You might be better off searching for people on BP or FB groups..
Right. But my question is what am I searching for? What titles/key words
thanks all
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Freddie Williams
Rental Property Investor · Norfolk, VA · Member since 2016 · 101 posts · 29 votes
3y
@Jay Ben Well from what I see from the FINRA site, they are called Capital Acquisition Brokers. Of course there are two different types of brokers. One who sells or buys securities like stocks, bonds. etc. Capital brokers "placement agents for sales of unregistered securities to institutional investors under limited conditions." Direct quote from the website. Sounds like we are both researching the same. I am trying to convert from single family investments, to multifamily. I have done most of everything regarding SFR, from rehab flips to holding as rentals. Started in the business as mortgage broker, then flips, to investor holds to commercial multi family property manager. Now I wish to be an owner, considering I know everything in reference to managing one. But I have anyways heard to find the money first, not the deal.

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