Dick Woodward wrote:Nate:
You may want to check with an attorney who is well versed in SEC regulations. There are very strict rules about who can and cannot accept a contingency payment (aka commission)for facilitating the sale of securities in a company, or of the company itself. For example, there are people who charge a commission for raising venture money for a company. This is generally illegal unless said person is registered as a broker-dealer. As I am not an attorney, I cannot advise on your particular situation, but I do know that there are a number of regulations involving who can or cannot accept a commission for facilitating the sale of a company; some of these appear to depend upon whether the buyer is purchasing the entire company (e.g., its stock) or merely the assets of the company. In any event, I would suggest that you get a legal opinion.
Dick, thanks for the information. We mostly deal with privately held companies in need of restructuring. This investment bank would pay me a finder's fee. A typical company in the medical space would be a doctor's clinic. We don't usually fund start-ups and don't do IPOs. In the case of an IPO, we have a partnership with another VC which would assist us if we wanted to take a company public. It is a dealer broker.
Yes, it sounds reasonable that a VC doing an IPO, financing, or selling a publically traded company would have to be registered dealer broker. I'll ask my colleague and his attorney at this company; especially if we are interested in a public company.
The reason I would like to put this on my resume is that it is really a sales job; a tough sales pitch at that.