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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10571
Experience:  30 years of corporate, litigation and international law
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I am a cofounder of a business that was formed as a llc in

Customer Question

I am a cofounder of a business that was formed as a llc in 2008. We did a reg d, 506 offering in 2008-2009 and raised $550k of the $2m we were seeking to raise. We now want to raise the rest ~1.5m.

My partner who is the CEO and president wants to pay me, the secretary and tax matters member to bring in new investors (5% earned in cash/salary comm) on every dollar I can raise. He also wants to offer the same thing to all of our current investors (24 others) to get the same opportunity.

My question is this: is it legal for me to receive a cash amount (%) for every dollar I bring in from new individual investors and angels?
I know business brokers tread on thin ice in regards XXXXX XXXXX paid for bringing in investors but I am a founder, am I treated differently?
Submitted: 5 years ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 5 years ago.

bizlaw :

Paying you a bonus for getting additional investors is not a problem. Other investors who are not employees run into the same problem as any other non broker dealer in getting paid a percentage of money raised. It is a very tricky area for them and you should have an attorney carefully lay out the ground rules. They can be treated as finders but it is a very fine line to walk. You as an employee officer do not have the same problem.

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