5 Comments
 

Things like this are always better to discuss and get in writing beforehand.

If you're close with them you can ask, but don't be surprised if he thinks you were just helping him out free of charge.

The good news is that, if you decide to do this again, you've proven you can source and you should be able to establish this fee without much pushback.

It's up to you how you want to handle this but it could end up being a "long-term greedy" thing.

 

I might ask one more time and let it die if not. Part of me wants to wait post-close (don't jinx the thing), but hard to roll equity after the fact. I'm honestly not sure if rolling equity would be viewed as more attractive or not from their perspective. Totally agree on setting up the arrangement ahead of time, I absolutely would have if I thought this thing had any potential of going anywhere. 

Of course it is not as easy to take the "long-term greedy" perspective now, but I could see the value in that. At the same time, cash now doesn't hurt. 

 

Really hard to do after the fact. While 1% isn't that much for a finder's fee, it's also a lot to pay for every time someone informally puts someone on touch / makes an email intro. As suggested, maybe you can discuss an ongoing arrangement and bring up your current referral in that context - to create an incentive for them to pay you to incentivize you to bring in  future deal flow. 

Also not to be your compliance officer here but it might cause a conflict with your existing firm. I know for me, I would have to disclose any such arrangements and it would be an awkward conversation with my team. Your firm might be ok with it if it's in a completely different space but something to be mindful of. 

 

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