Raising money can be a full-time job and takes years of experience to understand how it works. There are many individuals sometimes called brokers, that spend their lives helping companies raise the capital they need. Generally these third parties earn their keep by receiving a percentage of the amount that they raise – usually 5 to 10%. So when does it make sense to use a third party like a broker raise money?

 If you’re looking to raise multi-million dollars, there are very sophisticated brokers that will not only help you run the process but should be bringing relationships to the table.

When the fundraising efforts are $1 million or less there is normally not brokers involved because the fees they make are too small to justify the effort.  Once you get over the million dollar level there will be more brokers that will be willing to take you on. And certainly if you’re looking to raise multi-million dollars, there are very sophisticated brokers that will not only help you run the process but should be bringing relationships to the table. I know what you’re saying – 5 to 10% seems like a lot but a good broker is worth their weight in gold if they can help facilitate the conversation and help you through the process to a successful raise.