Finder's Fee Agreement For Raising Capital Template for Singapore

A Finder's Fee Agreement For Raising Capital is a crucial legal document that governs the relationship between companies seeking investment and intermediaries who help identify potential investors. Under Singapore law, this agreement establishes clear terms for compensation, duties, and regulatory compliance, ensuring both parties understand their obligations and rights throughout the capital raising process.

When do you need this document?

You need this agreement whenever your company engages external parties to assist in securing investment funding. This includes situations where you hire independent consultants, business brokers, or other intermediaries to introduce your company to angel investors, venture capitalists, or institutional funders. The agreement is particularly important in Singapore due to strict regulatory oversight under the Securities and Futures Act, which requires careful consideration of licensing requirements when dealing with accredited and institutional investors. You should also use this document when engaging finders for debt financing, private placements, or initial public offerings to ensure compliance with the Monetary Authority of Singapore's guidelines.

Key legal considerations

The agreement must clearly define the scope of services, fee structure, and success criteria to avoid disputes. Critical clauses include the definition of "qualified investment" and calculation methods for success fees, which typically range from 1-5% of funds raised. You should address exclusivity arrangements, confidentiality obligations, and termination provisions to protect sensitive business information. The document must also specify whether the finder has authority to negotiate on your behalf or merely make introductions. Consider including representations and warranties from both parties, indemnification clauses for regulatory breaches, and dispute resolution mechanisms. Payment terms should be clearly outlined, including when fees become due and any holdback provisions for performance guarantees.

Legal requirements in Singapore

Singapore's regulatory framework imposes specific licensing requirements under the Securities and Futures Act for certain capital markets activities. If your finder will be providing regulated services such as dealing with securities or advising on investments, they may require proper licensing from the Monetary Authority of Singapore. The Financial Advisers Act also governs situations where finders provide financial advisory services, potentially requiring additional licensing. Your agreement must ensure compliance with anti-money laundering and counter-terrorism financing requirements, including proper due diligence on introduced investors. The Companies Act mandates specific disclosure obligations for fundraising activities, and your agreement should address these compliance requirements. Additionally, ensure the finder meets fit and proper criteria if engaging in regulated activities, and consider whether the introduction of foreign investors triggers any foreign investment approval requirements under Singapore law.