Listen, I have been involved in several projects from a broadway musical to real-estate in Dubai. Despite the details, my job is to qualify the project and make sure it is a really DOPE idea, then introduce the right investors. Each experience has developed my skills as a “dealmaker” and I would love to share them.
During my research, I found nothing on Introducing brokers other than the saturated Forex & Futures Markets. Thus, here is my story.
First, let me break down to you what an Introducing Broker (IB) entails.
accepter of orders but not money: a person or organization taking orders to deal in futures or options without accepting payment from customers
Now that you know the definition, it is not as simple as it seems. There is a very grey area if you are not an “accredited investor“. Here is a link to our friends at the SEC, explaining in FULL detail what the guidelines are.
So in other words, if you are not an intellectual or ‘asset net worth’ $1m and make an annual income of $200k then you can’t join this boys club! The rules are there to cover soliciting and spam on high net-worth investments, however do you think just because someone has more money than someone else gives them automatic credit in investment? Who knows, i GUESS its there to protect us.
Here are some guidelines to follow so that you do not end up introducing an investor to a property and have legal issues down the road.
DO NOT DO THE FOLLOWING:
- Introduce the project unless you know the individual is accredited
- Communicate ANY of finances WHATSOEVER
- Make a commitment on behalf of your investor (Plead the 5th!)
- Discuss your project to anyone outside of the investment project (Even your Mom!)
- Spend your money before you get it (I did it!)
- Send your investment deals to potential investors unless qualified by “Producers”
So good luck with raising your money. Just be careful, cautious, and ready to be sued!
Please let me know if you have any tips, suggestions, or questions! I would be glad to write more if you ask me on something to write. Cheers!
