We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Placement Agent?

Jim B.
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

In finance, a placement agent is an individual or firm hired by one company to seek out investors for that company. This can occur when a private equity firm looks to raise money from outside investors for the purpose of buying other companies. A placement agent can also be involved when an established company is looking to raise capital from investors to increase business. Placement agents are often skilled at negotiating financing deals between two companies and often receive a fee based on the amount of business they bring in for their client.

Most companies or business enterprises reach some point where they need to raise capital. When this point arrives, such entities may not have the experience or the connections to find the financing they need to improve their operations. The ability to match up a company looking for money and investors willing to give out that money is a highly valuable quality to have in the business world. For that reason, a placement agent is often hired to make investment deals happen.

When a company hires a placement agent, it is generally getting an experienced investment expert who has brought together many different deals and has made numerous business connections. In addition to that, the agent has the ability to negotiate terms between the two parties. Such terms may include how much money the investors will pay or how much equity in the company they will receive.

A private equity company will often make use of a placement agent to find investors for its operations. By raising more cash from investors, the agent also broadens the scope of possibilities for the company's potential investments. On the other hand, an entrepreneur who has just started his own business and needs funds might also consider an agent to do some of the business legwork for him. Doing this allows the entrepreneur to focus his energy on the business operations while the agent handles any investment negotiations.

The typical arrangement between a company and a placement agent stipulates that the agent gets a fee based on the amount of investment money he brings into the fold. This provides incentive for the agent to work diligently to find investors for his clients. In some cases, an agent will be placed on retainer by a company and receive a steady fee. Such an arrangement might make sense if the company plans to employ the agent over a long period of time for various investment deals.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Jim B.
By Jim B. , Former Writer
Freelance writer - Jim Beviglia has made a name for himself by writing for national publications and creating his own successful blog. His passion led to a popular book series, which has gained the attention of fans worldwide. With a background in journalism, Beviglia brings his love for storytelling to his writing career where he engages readers with his unique insights.

Related Articles

Discussion Comments

Jim B.

Jim B.

Former Writer

Freelance writer - Jim Beviglia has made a name for himself by writing for national publications and creating his own...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.