Our startup is at a very early stage, and we do not want any institutional funding at this moment, for reasons out of the scope of this question. We are instead looking for funding from friends and family (and fools). I am offering a friend a commission, for every funding he helps me raise. E.g. if he brings in a person, who agrees to invest X amount in our company for Y number of shares, I will give my friend 1% of Y.
I want to know whether this is legal, and what other important things should I be aware of before getting into an agreement with my friend.