
Ask HN: Can I be compensated if i introduced a VC to a startup ? - ahmadassaf
If I introduced an investor to a startup and that investor ended up part-funding a series round, am I entitled to have more shares&#x2F;compensation as a result ?
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wmboy
Let's say a VC investor invests $500,000 into a startup, I don't think they'd
be keen to know that $50,000 of it gets passed straight to you and doesn't go
toward building the product.

Having said that, if it's an arrangement worked out with the VC beforehand,
then it could possibly work.

If we're talking about acquisition rather than investment, then that's an
entirely different matter of course.

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DerekQ
Connecting a company looking to raise money with a person or company with
money to invest is an entire industry. It often falls under terms like
"private equity fundraiser" or "corporate finance", though corporate finance
encompasses a lot more.

Typical rates of compensation for the middle man or company run from 1% to 8%
-- it depends on the deal you strike with the company looking to raise money.

Of course, you need a contract laying out your cut. And... you need to be
aware that you open yourself up to being sued down the road by the investor if
his investment goes south and he loses money. This happens a lot -- especially
when it's a private investor and not a company investing the money. For this
you'd need Professional Indemnity insurance, and you'd need it for the next
10-20 years - the lifetime of the deal, basically.

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forgotmysn
nah. do this a few times successfully though, and you could potentially become
a VC scout. But on any single introduction or transaction, that's just being
helpful, nothing more.

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ian0
> that's just being helpful, nothing more.

To add, the introduction itself is a very small part of the process of closing
funding.

Typically consultants/bankers who help with larger fundraising rounds and
charge for it would provide much more services beyond a simple
introduction/recommendation.

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offsetr
Not really. Unless you agreed on it before the introduction on paper. The VC
agreeing with it would help it be less scammy.

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the_watcher
Can you be compensated? Absolutely. Are you entitled to it? Absolutely not.

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pidu87
Nope. In most of the world you need some kind of contract verbal or written.
Sorry.

