Family office introducer asking for $5k retainer – normal or red flag?

January 23, 2026

by a searcher from Henley Business School in England, UK

Hi all, I’m currently evaluating an intermediary who claims to introduce deals to family offices and small private funds. The proposed structure is a $5k upfront retainer, with a 2% success fee paid by the family office if capital is deployed. The intermediary claims to have spoken with ~40 family offices and says a large portion are open to initial meetings, though no specific names or recent closes have been shared yet. I’m early in the process and trying to be disciplined about capital allocation and signal vs noise. For those who have raised from family offices or used placement agents: • Is an upfront retainer at this level common or a red flag? • What proof or structure would you expect before proceeding? • Have you seen retainers work well in practice, or is success-only the norm? Appreciate any perspectives or war stories. Thanks in advance.

Reply by an intermediary
in Austin, TX, USA

People are so used to the charlatans out there that they don't understand how a legitimate investment bank works and the bank's economics. Here's my two cents: The first hurdle to clear is the legal one: are they a registered broker dealer or a registered representative of a broker dealer? If not, their proposal is illegal. There is no such thing as "finders". An unregistered person cannot perform anything more than providing you names and contact data. Anything else is considered selling and unregistered people performing sales are illegal. That being the case, the $5,000 buys lots of contacts via list services that others here have mentioned and would be a legal and clear alternative. All registered representatives are listed on Broker Check, along with any disciplinary actions taken against them. See: https://brokercheck.finra.org/search/genericsearch/grid The second hurdle is one of expertise. If they are a registered broker dealer, the question remains as to their expertise and ability to raise capital. You would have to ask serious questions about their ability here. Get references etc. There are a lot of charlatans out there. Be careful. Retainers in investment banking are normal if there is a lot of coaching with the client that needs to happen to in order to be successful. We don't engage investment banking clients without a retainer unless our role is restricted to "dialing for dollars". Everything else: financial model, pitch deck, your responses to anticipated questions must be rock solid and investor ready, otherwise a monthly retainer applies. The third hurdle is the quality of your deal and deal economics from the banker's perspective - is your deal economically compelling? A legitimate investment bank will spend 30 days of due diligence time on your deal in order to be in compliance with FINRA rules. Let's say that is 100 hours at $400 per hour. The typical ETA deal has a 50/50% chance of even finding a target. No legitimate investment bank will spend $40,000 before they even get to "dial for dollars" without some sort of retainer to cushion the blow if your deal falls apart. Then, there is the time based cost of spending hundreds of hours "dialing for dollars". It takes just as much effort on my part to close a $2 million ETA deal as it does a $25 million real estate deal. So, the deal economics don't work for the investment bank with good quality deal flow outside of ETA. The above explains why we don't raise for VC level deals or ETA deals despite have great appreciation for and affinity to the founders/searchers in the asset class. We do however raise VC/ETA for 1) compelling rollups that will result in a long term relationship and 2) our friends.

Reply by a searcher
from University of Pennsylvania in Philadelphia, PA, USA

I echo most of what you've heard: - Talk to sell-side references that have used them before to raise money - Most of the third-party marketers I know are registered with a BD, so that's a simple check. If it's just a person claiming a rolodex, I'd be skeptical. The retainer may be their filter. If you get good sell-side references and they're registered, those are two strong indicators. Connections to money are valuable and some people have spent decades developing the trust required for the person on the other side to take their call. There are also a number of people who understand the position you're in and try to exploit that to earn a fee and then double-end the deal (i.e. they're cold-calling family offices claiming access to good deals for a 2% success fee).

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