Venture capital (VC) finder`s fee is a commission paid to individuals or firms, who help in connecting investors and entrepreneurs. Finder`s fees can range from 1 to 10 percent of the investment amount, depending on the industry, the size of the investment, and the experience of the finder. However, before any investment is made, it is crucial to have a venture capital finder`s fee agreement in place.
A Venture Capital Finder`s Fee Agreement is a legal document that outlines the terms and conditions of the commission paid to the finder. It details the role of the finder, the amount of the commission, and when and how the commission will be paid. Here is a sample Venture Capital Finder`s Fee Agreement:
The parties involved in this agreement are the investment seeker (the “Entrepreneur”) and the Venture Capital Finder (the “Finder”).
2. Scope of Work
The Finder agrees to provide the Entrepreneur with a list of potential investors interested in the Entrepreneur`s business. The Finder will introduce the Entrepreneur to these investors and provide ongoing support until the investment is secured.
The Finder`s commission shall be ___percent of the investment amount. The commission shall be paid by the Entrepreneur upon receipt of the investment amount.
The commission shall be paid to the Finder within ___days after the Entrepreneur receives the investment amount. The payment shall be made via wire transfer to the Finder`s bank account.
The Entrepreneur and the Finder acknowledge that any information shared during the due diligence process is confidential and shall not be disclosed to any third party.
Either party may terminate this agreement at any time by giving written notice to the other party.
7. Governing Law
This agreement shall be governed by the laws of the state in which the Entrepreneur`s business is registered.
8. Entire Agreement
This agreement contains the entire understanding of the parties and supersedes all prior agreements and understandings, whether written or oral.
In conclusion, a Venture Capital Finder`s Fee Agreement is a vital document that outlines the terms and conditions of the commission paid to the finder. Both parties should review the agreement carefully before signing to ensure that they understand their obligations and rights. By having a clear agreement in place, the finder and the entrepreneur can establish a mutually beneficial partnership.