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Business Consulting For The 21st Century Via A Holistic & Intelligent Approach

Friends with investors and their benefits

Answered => “If a friend connects you to an investor who funds your startup, are you obligated to share some equity or cash with the friend who made the introduction?” on Quora.

http://www.quora.com/If-a-friend-connects-you-to-an-investor-who-funds-your-startup-are-you-obligated-to-share-some-equity-or-cash-with-the-friend-who-made-the-introduction

=> My answer…

I didn’t go to law school (yet?) but I think it depends on the relationship between your friend and the investor.

If things go good you probably have nothing to worry about. However, if things go sour then suddenly that investor is going to believe he/she got bamboozled. I’m going to presume that a person of that stature has their lawyer on speed dial.

Unless the investor is/was aware that him/her being referred was the result of business transaction then I would try to avoid any sort of formal compensation for your friend.

It just seems ethical that way, yes? If you were the investor, wouldn’t you want to know?

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