In using the services of an agent to find angel investors, what is a reasonable commission to offer an agent?

I am looking to raise First Round angel funding of US$1.5M in exchange for 40% of a company that is going to be based in India and produce an innovative product (for which R&D and consumer testing has been completed) to break a global monopoly in a US$ 4 billion high end market?

First of all, do NOT pay them anything up front. Many (if not most) of the people who claim to be able to provide this service to you are bogus (or at best ineffectual).

Next, make sure that they are an official "Broker/Dealer" registered with the US Securities and Exchange Commission. if they are not (which is the case for about 95% of these folks) it is possible for the whole deal to unravel.

Finally, you should start the negotiation (and *everything* is a negotiation) on price with the classic "Lehman Forumula" (see the link below for a good explanation), which starts out with 5% of the first million dollars raised, dropping down a point at a time until it reflects 1% fee on everything raised over $4 million.

All that said, however, you may be able to do as well, if not better, on your own, by going directly to angel investment groups. There is an excellent directory of most of the large ones on the web site of the Angel Capital Association (see below.)

Good luck with your fundraising!

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