How do you enlist financing help without succumbing to finder’s-fee-extortion?

4 thoughts on “How do you enlist financing help without succumbing to finder’s-fee-extortion?”

  1. Two questions:

    1) Are these guys all appropriately licensed for this sort of thing (i.e., are they broker-dealers)?

    2) Do you have a contract with any of them?

    Three suggestions:

    1) Pay exactly those you have a contract with.

    2) Sever your relationship with the problem individual.

    3) Ensure that your non-disclosure agreements have teeth, and enforce them. It will help you to control who is allowed to shop your deal.}

  2. I think it makes sense to just put a clause in your contract that if they do not directly refer an investor, they agree to split the fee evenly with all those in the “chain”. Obviously, find a lawyer and legal-ese this. The lawyer I use, Jim Burk of Burk & Reedy, would be an excellent resource to answer questions like these. He wrote a book called “Financing Your Small Business.” Here is his site: http://www.burkreedy.com/ You can contact him on the phone.}

  3. We were bing informal, no agreements, at first. Essentially enlisting personal contacts. Now we have an agreement, that lists out a decending percentage for each party in a relationship chain.}

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