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Compensating Fundraising Advisors Without Expanding Venture Partner Pool

We’re launching a VC fund in Central Europe and have a few advisors/connectors helping with fundraising. Some expect compensation, but we’d prefer not to bring them in as venture partners to keep that group small.
We’re considering a success-based fee (e.g. % of capital raised), but have a few questions:
  1. Is a finder’s fee (% of capital raised) common in VC fundraising?
  2. What are typical terms for this in Europe?
  3. Should this come from fund expenses, the management company, or handled otherwise?
Any advice, especially from a European perspective, would be much appreciated.
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Success-based fees (typically called placement agent or success fees, not pure "finder's fees") are somewhat common in VC fundraising - however generally only when using professional intermediaries. Transaction-based compensation is typically licensed/regulated.

General information for Europe:
  • Success fee: ~1.5–2.5% of capital raised (often benchmarked to ~1 year of management fees).
  • Lower end (~1.5%) for strategies like credit/funds-of-funds; closer to 2–2.5% for VC/growth.
  • May include a monthly retainer (€5k–15k, sometimes creditable), paid over 1–4 years post-close.
If permissible, these fees are almost always paid by the management company/GP, not as fund expenses. Thinks of it this way - why would LPs want to pay these types of fundraising costs when it is the GP's job? This generally aligns with European market norms under AIFMD transparency rules.

For informal connectors (possibly considered "unlicensed placement agents"), success fees are highly risky due to regulatory scrutiny (MiFID II, potential broker-dealer issues) — many funds use fixed fees, equity (not success based), or advisory roles instead. Please consult experienced local counsel for advice about your specific situation. 

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