Fund Raising Compensation

[Jesse Chunn]

How are people usually compensated for raising funds. For example, if someone finds investors for me and raises, say, $300k for a down payment on a property that sells for $2 million (I bring $200k myself), how much would I expect the fund raiser to get at closing? I assume it would be a percentage, but what percentage, and are there other approaches besides a percentage?

[Anthony Chara]

I'd say, what time are visiting hours at the local penitentiary???  You need to be VERY CAREFUL!!!! You can pay someone a referral fee if all they do is introduce you to a potential investor. It cannot be percentage based. It needs to be a set fee no matter how much they help you raise. I pay between $500-$1000 for each referral that turns into an investor depending on the deal, not the amount raised. Beyond just an introduction, they CANNOT help you raise funds unless they have a Securities License or are a Principle in the deal. I strongly suggest you speak to a good SEC attorney about this before you end up in hot water.