Finder's fee vs referral agreement vs broker agreement: what each one allows

The verdict: match the agreement to what you will actually do

Use a referral agreement when your job ends at the introduction. Use a finder's fee agreement when you are paid to locate a counterparty for a specific transaction, which in capital raising and M&A can raise securities-registration questions. Use a broker or advisory engagement when you will run the process, negotiate and help effect the transaction, which is the core of a sell-side M&A mandate. The title on the document matters less than the activities it describes and how you are paid for them.

For SourceX, the partner's role is narrow by design: introduce a US company and share basic fit information such as size, history, systems and who can sponsor a license. Partners never negotiate price or terms, never handle records and never handle money; SourceX and the company do that work.

Side-by-side: referral, finder and broker agreements

What do the primary sources say about brokers and finders?

• Broker registration turns on activities. Section 15(a)(1) of the Securities Exchange Act, 15 U.S.C. 78o, makes it unlawful for an unregistered broker or dealer to use interstate commerce to effect, induce or attempt to induce securities transactions, subject to listed exceptions. The SEC's Guide to Broker-Dealer Registration explains that whether someone must register depends on what they actually do.
• The M&A broker exemption is narrow. Section 15(b)(13) of the same statute covers brokers effecting securities transactions solely in connection with the transfer of ownership of an eligible privately held company: one with no securities registered or reporting under the Exchange Act that, in the fiscal year before the engagement, had EBITDA under $25 million or gross revenues under $250 million. Further conditions in the statute also apply. It took effect on March 29, 2023, according to a Morrison Foerster alert. It concerns M&A securities transactions; it says nothing about data-licensing introductions and should not be read as covering them.
• No finder exemption has been adopted. The SEC's own meeting notice states that the Commission proposed a limited, conditional finder exemption in 2020 but did not finalize it. The SEC's Small Business Capital Formation Advisory Committee recommended in February 2026 that the Commission address finders; a recommendation is not a rule.
• FINRA members face their own payment limit. FINRA Rule 2040 bars members and their associated persons from paying compensation to an unregistered person who would have to register as a broker-dealer to receive it, which matters if your firm is a broker-dealer that pays outside finders.

This is general information, not legal, tax or financial advice. Whether any registration requirement applies to what you do is a question for your own securities counsel.

When a referral agreement is the right choice

A referral agreement fits when all of these are true:

• You know the owner or CFO and can make a warm introduction.
• You will share basic fit information and nothing confidential.
• You do not want, or are not permitted, to negotiate or advise on terms.
• You want compensation that does not depend on your involvement after the introduction.

That describes a typical introduction a sell-side advisor or business broker makes outside a live mandate, such as mentioning a client's records to a data-licensing platform. The page on referral opportunities for M&A advisors shows which clients tend to fit, and what is a referral fee agreement explains the document itself.

When a finder or broker agreement is the right choice

The heavier agreements fit when any of these are true:

• The client asks you to find and approach specific counterparties for a transaction.
• You will negotiate price, structure or terms, or help the parties close.
• Your compensation scales with the size of the transaction and your continuing work.
• The transaction involves securities, such as a sale of stock or a capital raise.

In those cases the engagement letter is the right document, and your registration status or an applicable exemption has to fit the work. The success fee vs referral fee comparison shows how advisors keep the two kinds of compensation apart when both apply to one client.

How SourceX fits

SourceX partners sit in the referral column. Everything after the introduction belongs to SourceX and the company:

1. The partner introduces the company through a referral link or the referral form.
2. SourceX qualifies it on size, history, data breadth and rights.
3. The company builds a data inventory of its systems and records.
4. SourceX and the company agree price and terms.
5. AI labs and data buyers review the opportunity.
6. The deal closes, the data is delivered and the company is paid.
7. The partner's reward is paid after SourceX receives payment.

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company, and the reward is never deducted from what the company receives. The full sequence is on how SourceX referrals work.

Lines to hold as an introducer

• I make the introduction and share basic fit information only.
• I do not negotiate price, terms or exclusivity on the company's behalf.
• I do not collect, export or forward the company's records.
• I do not receive or hold anyone's funds.
• I told the owner how I am compensated before the introduction, following the guidance on whether you have to disclose a referral fee.
• I checked my own registration status and firm policy.
• I know how pending introductions are treated if my agreement ends, as covered in referral agreement tail provisions.

Next step

If your role ends at the introduction, the referral model fits. Register as a partner to get your referral link.