Broker-Dealer

A broker-dealer is a firm or individual responsible for purchasing securities for its customers as well on its own behalf. In the context of venture capital, broker-dealers may help companies fundraise from investors and take a transaction fee for doing so.

Broker-dealers are compensated through transaction fees (known as “brokerage fees”). In order to legally take brokerage fees, broker-dealers are required to register with both the SEC and FINRA and pass a certification exam.