Success Fee

July 30, 2016 by Alexa Cleek -

A percentage commission paid to an intermediary or other individual as an incentive on the closing of a large financing transaction.⁷

Angel Capital Association

Alexa Cleek

Definitioner

Intermediary

Either a "Broker-Dealer" or a "Portal", both allowed by the JOBS Act to consummate a securities-based crowdfunding transaction.¹

Closing

An investment event occurring after the required legal documents are implemented between the investor and a company and after the capital is transferred in exchange for company ownership or debt obligation.³
This is the transaction that occurs after entrepreneurs and investors legally exchange all required legal documentation and capital that is needed in their business deal. When an investor “closes in on a deal,” they have already negotiated with the entrepreneur the details encompassing corporate ownership and monetary obligation.⁴
Closing is the final event to complete the investment, at which time all the legal documents are signed and the funds are transferred.⁵

Related Terms

Weighted Average Antidilution | Full Ratchet Antidilution | Dilution Protection

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