TLDR:
A finder’s fee is compensation paid to an intermediary who facilitates a business transaction, such as connecting a startup with an investor, acquirer, or strategic partner.
Finder’s Fee Structures
Finder’s fees can be structured in various ways depending on the transaction type: flat fees for introductions, percentage of deal value (typically 1-5% for M&A, 2-10% for venture introductions), equity warrants, or success fees paid only upon transaction completion. In the securities context, the SEC requires that anyone receiving transaction-based compensation for finding investors must be registered as a broker-dealer, which means unregistered finders accepting success fees for introducing investors to securities offerings may be violating US securities law.