Are there licenses one needs to hold to receive a fee for equity placement? For example, do I need a series 7 or something to take a fee if market a developers deal to a family office? Would this change if I worked for the developer as an employee?
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Based on the most helpful WSO content, to place equity and receive a fee for equity placement, you generally need to hold the appropriate licenses. Specifically, the Series 7 license is often required for activities involving the marketing of securities, which includes raising equity for developers or other entities. This is because such activities are regulated by the SEC and FINRA, and receiving a fee for equity placement without the proper licensing could be considered a violation of securities laws.
If you work directly for the developer as an employee, the situation might differ. In this case, you may not need a Series 7 license, as you are not acting as a third-party broker-dealer but rather as part of the internal team. However, this can depend on the specific structure of the compensation and the nature of the activities you are performing. It’s always advisable to consult with a securities attorney or compliance professional to ensure you are operating within the legal framework.
Sources: Licensing For Dummies, Development where does the real comp come from? What made you successful?, Family Office vs. Traditional LP Career Path, Biotech finance part 2: valuation methodologies and modeling considerations, From Real Estate Finance to Founder of Development Company - Q&A
I've done this a number of times on the side- DMing you
Would you mind DMing me as well? Im super interested as well.
Technically speaking yes you need a 7 to place equity for another person. That is considered a security. You are able to place equity for yourself without a license. If you’re placing a few minion bucks or less I can’t imagine this would ever peak the interest of the SEC.
Interestingly enough, most of the “capital markets” brokers at Newmark, jll, etc are blatantly breaking the law if they are placing equity for a sponsor without a license. I am told from a friend who’s a lawyer that the SEC is about to crack down on the formation of JV formations by these types of groups for institutional asset managers and sponsors. Buyer beware…
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