Legal Question in Business Law in New York

Venture Funding - Success Fee

Dear Sir/Madam,

Our company deals with many entrepreneurs in search of venture capital and we often facilitate relationships for them with Venture Capitalists. To date we've done this primarily through our business forums and we've never taken any success fees or percentage points. In short, we are interested in actaully taking some of the companies that come our way to our network of investors by the hand and charging for it but we're not sure what is legally required from us to begin. We do not have a dealer broker license and aren't sure if that would even be required.

Please let me know if there is any assistance and insight you can shead on what we would need to do.

THank you for your support.


Asked on 3/12/03, 11:57 pm

3 Answers from Attorneys
Gary Adelman Adelman Matz, P.C.

Re: Venture Funding - Success Fee

This communication is for informational purposes only and is not intended to create an attorney-client relationship or any other type of relationship, which, under the policies of Gary Adelman, Esq. , can only be created by execution of a formal retainer agreement.

It is slightly more complicated than that, but the short answer is that you should have both a securities license and have a corporate home for that license, a broker/dealer. Most smart investors will not do any kind of financing that would jeopardize their situation when the time comes to do an IPO, because of the type scrutiny that is involved.

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Answered on 3/14/03, 12:45 pm
Michael Paradise Law Offices of Michael S. Paradise

Re: Venture Funding - Success Fee

The conservative answer is that you should be registered as a broker-dealer (or registered as an associated person of a broker-dealer). Each transaction needs to be analyzed based on the facts of the transaction.

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Answered on 3/13/03, 10:18 am
Kenneth J. Ashman Ashman Law Offices, LLC

Re: Venture Funding - Success Fee

While this isn't an area of my particular speciality, I do know a lawyer who could help you.

-- Kenneth J. Ashman; www.AshmanLawOffices.com

This communication is for informational purposes only and is not intended to create an attorney-client relationship, which, under the policies of Ashman Law Offices, LLC, can only be created by execution of a formal retention agreement.

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Answered on 3/13/03, 3:55 pm


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