The SEC doesn't care what you call it. If you're identifying investors, making introductions, and getting paid when deals close, you're a broker and need to register. Using an unregistered broker lets investors demand their money back.
Referral fee, finder's fee, consulting agreement, strategic partnership. The SEC doesn't care what you call it. Here's the actual test. What is this person doing, and are they being paid based on whether the transaction closes? That's it. That's the whole test. If someone is identifying investors, making introductions, and getting paid a percentage of what those investors put in, that's brokerage activity. The name on the agreement doesn't change what's happening. It's just a referral doesn't hold up as a defense. A referral that results in a securities transaction for which the person is compensated based on that transaction is brokerage activity, and the consequences don't fall only on the capital raiser. If you used an unregistered broker to raise capital, that's a compliance failure. sitting in your offering history, and investors brought in through that arrangement have the right to demand their money back. The substance of what's happening controls the legal outcome, not the label. What compliance alternatives actually look like and what to do if you already have this in place, that's in the long form. See the link in the bio.
