I've been advised on multiple occasions that agreeing to a finder's fee as a percentage of capital raised is illegal in the United States, unless the "finder" is a licensed broker-dealer.
Despite this, finder's fees seem to be ubiquitous in the startup world, and I've already encountered multiple firms/people who professionally connect startups with investors in exchange for a finder's fee, and yet are NOT licensed broker-dealers. This casual attitude towards finder's fee among the startup community in the United States seems totally oblivious of the potential legal ramifications.
So my question(s) is:
(1) Am I correct that finder's fees are actually illegal under SEC regulations?
And (2), if so, what are the potential undesirable legal consequences of agreeing to pay a finder's fee?