I have a new, patented invention with a huge market. I have used all available personal capital and am ready to find funding in the $500,000 range for production and marketing and sales. I have no equity in my home/farm.
I met a "broker" yesterday who assured me she could find money for me. She wanted $5,000 to start the business relationship, another $10,000 later with the assurance she would have investors, and she wants 10 percent of the investment. I am very leary of this; is she a scam artist? Or is this common in the money-brokering world.
A couple of comments:
1. Based upon years of experience working with entrepreneurs in early stage businesses, YOU (not your plan or idea or patent) will be the single most important ingredient in securing funds. Investors will want to "look you in the eye" before they write a check.
2. Anyone who receives a "success fee" (10% of the investment) MUST be a registered securities broker-dealer.
3. Sinice you are not a public company - anyone who "makes an offer of securities" must either be licensed (above) or be an officer of the company.
The bottom line is - it is virtually impossible for a 3rd party to secure funds for a startup situation.
You would be far better served to engage with someone who can teach, guide and support you in the process of securing the investment.
Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan
and QuikStart Capital Programs