Using Unlicensed “Money Finders” Now Too Risky
Entrepreneurs trying to raise capital to grow a business frequently run across individuals describing themselves as a “finder” and offering to help them structure a private offering and sell that offering using their contacts. They will typically ask for limited or no up-front compensation but will take a percentage of the money raised. This practice is so prevalent that it is clear that most entrepreneurs, and often the finders themselves and the lawyers involved, are unaware that these services are illegal unless that person is properly licensed. Even if aware of the licensing requirements, most are unaware of the potential criminal and financial consequences for not just the finder and the company, but also the company’s directors and officers.
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