funding, venture-capital, fundraising, commissionsIf a person connects you to a VC firm through their contacts and that firm ultimately funds your company, what metrics are used to set the finder’s fee? Does such a commission vary with the amount of money raised? Does such a commission vary for an established profitable company with revenues that wants to expand versus a startup with no track record? Are there standards that typically prevail for such commissions?
There are some individuals who can help you in the process of getting funded by a VC firm. Some call them Startup-Advisors.
For those who are not confortable with an Accelerator Program but still need some advice and direction by someone more experienced, this could be an interesting option.
They will not only introduce you to several (or the right!) VC firms but also will help with the pitch deck, review the legal terms and even schedule meetings with potential customers.
How much they get (in equity)
Usually something between 0.25% and 5.00% of equity, depending on how much of time/advice he is going to give to you. (Would be smart of your part to ask for a vesting schedule clause).
But if all you need is "just a connection" then will be probably less than 2.00% - More than that is too much.
Those numbers assuming you are pre-A-round
How much they get (in money)
If you are unwilling to give up on your equity and really want to pay a fee, there are some expert-on-demand firms who provides advisory (including introducing to VC firms) and charges you money instead of shares.
In the case of Gerson Lerhman the cost to participating startups is $12,500 for a six-month subscription to the “outsourced advisory board”-style program and $25,000 for a year-long run.
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