Asking for a finder's fee: How not to look like a jerk.

September 17, 2008 7:40 AM

How and when to ask for a finder's fee?

My company shares office space with another company in the same industry. Based on friendly conversations between employees, I'm aware of a project they're currently looking to raise money for from outside sources. I have a personal contact in the industry that might be a great fit for the project, and I'd like to introduce them.

In this sort of situation, as I understand it, a finder's fee is not completely unreasonable. That is, a finder's fee only if my contact ends up providing money. But herein lies the issue I'm having trouble with. I'm on the bottom of the totem pole at my job due to age and experience, I've never negotiated something like this before, and I'm worred it might be considered a bit brash to walk in and ask the other company to sign an agreement granting me that fee in the case of consummation.

The fee would only apply to this specific contact. If my contact can't do it, but introduces the company to someone that will, maybe a half-fee is in order. Either way, I'm sure details could be worked out.

So my question is, what would be the best way to approach this, and at what point in the process is the best time to bring it up?

(I have these terrible images of going in there, sitting down and saying "I have a great contact, but you can't get it unless you pay me" - I understand this might be the essence of a finder's fee, but how do I make it sound less...sleazy?)

posted by undercoverhuwaaah to work & money (5 comments total)

There is often a bonus for internal employees who refer staff. In my experience, it's not huge, certainly under a thousand dollars unless the field is highly specialized. Ask your friends in that company if they're offered that type of bonus. If they are you could ask to have it extended to you.

However, it seems to be a very, very odd request. I'm used to paying recruiters who's job it is to find and screen candidates. I've never had someone ask to be paid for networking.

I have these terrible images of going in there, sitting down and saying "I have a great contact, but you can't get it unless you pay me" Me too. Particularly, the "I get half" if anyone my contact introduces you to is hired. What does your friend get?

Networking with people in other companies in your industry has value. Making it a cash transaction squashes the relationship building aspect of deal.
posted by 26.2 at 8:43 AM on September 17, 2008

Another thing - if the company said no, would you withhold the information from your friend? If you know of the perfect job for someone, then it would be lame to withhold that information simply because you can't find a way to profit from it.
posted by 26.2 at 8:46 AM on September 17, 2008

Just to clarify, this isn't for a job reference. Company A is looking to raise money. I have a contact at Company B that might be interested in providing that money. I would be the person introducing Company A and Company B.
posted by undercoverhuwaaah at 8:51 AM on September 17, 2008

Do pass along the information. Don't ask for or expect a finder's fee. The karmic rewards of providing a valuable contact to others more experienced in your industry will far outweigh any short term financial benefit. If you cultivate this attitude moving forward in your career, I promise you won't be sorry.
posted by eileen at 8:53 AM on September 17, 2008 [1 favorite has favorites]

In that case, I'd ask your contact person at company B about it first. In a venture capital deal you might find some willingness to pay the finders fee.
posted by 26.2 at 8:57 AM on September 17, 2008