I work for a REPE firm as an Asset Manager and have several equity sources I am trying to bring on. The only person in the company that sources equity is one of the partners in which he only deals with high net worth individuals. Bringing on equity is obviously outside of my job role so I am unsure on how to be respectfully compensated for this. Finders fee? Equity in the deal? etc..? what is the status quo at other firms?
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Don't do it unless you know you will be getting compensated in a material way for this added value.
Are you new at this firm? If you are new, understand the culture and environment you are getting into. You should wait at least a year or two, and a potential promotion.
CRE game is all about who can raise equity, you will find a deal if you have capital. If your firm in charging acquisition fees and you can take them to the next level by doing bigger deals, WTF would you introduce them to new capital sources if you won't see any of the potential upside?
Don't do it unless you have something in writing. I know plenty of guys that would gladly sign a compensation agreement with you. Hell my own firm has given outside capital raisers there own choice of equity in the deal or cash at closing. We'd 100% sign a compensation agreement with you if you brought us some equity, why not, you earned it. Don't put your relationships out there without a guarantee.
Personally, I don't know if you should have such a mercenary attitude as the commenters above, but yes it has economic value and getting compensated for such is entirely reasonable and expected.
Still, what is your actual relationship to this equity and what type is it? I'm guessing HNW individuals by context? That makes a big difference if you are sourcing from a pool of friends and family (and thus limited depth) or if it was major pension funds (which I don't think you imply by context).
You can approach in a generic way.... ask if there would be compensation if you did source equity from personal relationships, don't give it up that you think you can. Get that info up front. As for getting a contract or anything upfront, I wouldn't be that cavalier, but a confirming email where you outline the details and maybe ask a question or two to clarify is a strong start of a paper trail. I doubt that would stand up in court, but if your firm is honorable, that is enough. If you don't think your firm is honorable, to do what they say they will, don't bring them money and find a new job.
To clarify my above statement as well, I should have said you should ask first if there would be some sort of compensation prior to bringing any equity on. You definitely don't want to walk in with a printed compensation agreement and a pen for them. Have a casual talk with them about it, but my point is to protect yourself in writing. They may even compensate you but for all we know they could give you like a $1k check and you bring in like millions in equity. So its better to just have this cleared up if they do agree with paying you for it.
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