When Can You Get Paid to Raise Money

Just the idea of people paying other people to raise money for the only way you can legitimately do it is if you actually become a legitimate co-sponsor in the deal, then you can potentially fit into what we call an issue or exemption. But in that case, you cannot get transaction based compensation. So your compensation still can’t be based on whether somebody brings in money or not. And you’ve got to be doing real work like substantial duties in the deal, just like you know, you’ve got whether it’s the due diligence part of the underwriting, the acquisitions or the asset management or whatever it is you’re doing, it has to be substantial. And your primary role needs to be that it can’t just be raising money. If you’re just raising money, and you’re part of the GP because you’re bringing the money, you’re not going to fall into the issue or exemption. And yes, he’s starting to clamp down on that.

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