Q: What is a fair success fee to charge for helping an entrepreneur find an investor?
It’s complicated.
VCs are allergic to brokers for venture financing, at least until the later stages (say $100m+).
But … but …
Folks that do help for real, sometimes, do deserve to be paid.
The simplest way is via a material, but not huge, stock option grant.
I don’t need (or want) this equity today, but 2 start-ups that are Unicorns today … that I found their Seed / Series A investors for them both gave me grants of about 0.25%. I did more than just that (source the investors), but the grants were made after. In both cases, NO ONE else gave them a term sheet other than the investors I not only introduced them to, but used my social capital to vouch for.
I didn’t ask for any equity, but it was, in those cases, both appreciated. And it was the right thing to do.
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