I really like the idea of searchers offering deals they passed on to the broader community. This can be very valuable to a fellow searcher particularly when the deal is proprietary. I often have to say no to companies that other folks might love (e.g. companies dependent on veteran-owned small business set-asides but I'm not a veteran).

I think it makes sense to have a finder's fee arrangement in such a situation, mainly to incentivize folks to take the time required to pitch an opportunity to the community and then craft / coordinate a warm intro. My understanding is that paying this fee only on successful close is the norm because a) most searchers are cash-poor and b) the opportunity is only lightly due-diligenced at this point so could easily be a dead end, and therefore paying for it before closing/due diligence seems unfair.

So far I've signed 2 such finder's fee agreements to get company information, and have offered one deal myself.

My concern: a contact of mine raised a red flag that paying transaction-based compensation is a hallmark of broker-dealers (based on SEC guidance) and therefore it is important to only enter into such contracts with registered brokers.

If this is the case, doing a searcher->searcher finder's fee arrangement is .... not enforceable? A bad idea? Not sure. Do others have experience with this / perspectives on this?