Crowdfunding / syndication Partnering with a capital raiser and Fee structure
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.
#4 All Forums Contributor
- Investor
- Northern Virginia
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.
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.
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?
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.
#4 All Forums Contributor
- Investor
- Northern Virginia
@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.
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?
Quote from @Jay Ben:You might be better off searching for people on BP or FB groups..
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.
@Jay Ben very good questions.
Quote from @Brock Mogensen:Right. But my question is what am I searching for? What titles/key words
Quote from @Jay Ben:You might be better off searching for people on BP or FB groups..
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.
thanks all
@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.