Creator as Sponsor or Paid Promoter? How to Structure Your Role in a Real Estate Deal
A creator who brings followers to a real estate deal can hold very different roles, and securities law treats each differently. A real sponsor or co-sponsor owns part of the business and earns sponsor fees and profit share. A paid promoter gets paid for sending people to someone else's deal, which brings disclosure rules and broker-dealer risk. Pick the role before you post.
New to this? Start with our guide to how creators raise money from followers for real estate.
The four common roles
A creator can be a sponsor, a co-sponsor, a paid promoter or an unpaid fan, and each role carries different legal duties.
| Role | What you do | How you're paid | Main legal issue |
|---|---|---|---|
| Sponsor | Run the deal and the business plan | Sponsor fees and promote | Antifraud rules, exemption compliance |
| Co-sponsor | Share real duties, such as asset management or investor reporting, and invest your own money | Share of fees and promote | The role must be real, not just a label |
| Paid promoter | Promote someone else's deal | Flat fee, or per investor | Section 17(b) disclosure; broker-dealer rules if transaction-based |
| Unpaid fan | Share the deal because you like it | Nothing | Still avoid misleading statements |
Why commissions are the danger zone
Section 15(a) of the Exchange Act generally bars unregistered brokers from inducing the purchase of securities. SEC staff has called transaction-based compensation a hallmark of broker-dealer activity. A creator paid per investor or per dollar raised may be acting as an unregistered broker, and investors brought in that way may have rights to demand their money back. See paying capital raisers.
What a real co-sponsor looks like
A real co-sponsor has operating duties, invests their own money and is paid through sponsor economics, not per dollar raised.
- Has ongoing operating duties beyond marketing.
- Puts their own capital in on the same terms as other investors.
- Is paid through sponsor economics, not per dollar raised.
- Appears in the offering documents with their role and conflicts disclosed.
Paying for promotion
If someone is paid to promote a deal, Section 17(b) requires disclosure of the payment and its amount. In 2022, Kim Kardashian settled SEC charges for $1.26 million after an undisclosed paid Instagram post about a crypto token. A flat fee that doesn't depend on results is lower risk than commissions, but have an attorney review it.
If you're new to operating
Many creators have an audience and no operating track record. In that case, partnering with an experienced operator as co-sponsors is the usual route. Investors check track records. See how to vet a syndication.
A checklist for deciding your role
Answer five questions before you post anything about a deal.
- Will you own part of the deal and carry real duties?
- Will you invest your own money?
- Are you being paid anything tied to how much others invest?
- Is the payment disclosed in the offering documents and in your content?
- Has a securities attorney reviewed it?
Who this isn't for
Being a sponsor isn't for creators who only want to promote a deal and walk away. Sponsors take on real duties and legal responsibility, and the simpler 'paid promoter' role carries its own risks.
How DoorRaise treats creators
DoorRaise is for sponsors. Creators can be sponsors of their own deals or co-sponsor with an experienced operator. Our posting rules don't allow paid promotion of a deal by anyone who isn't a sponsor of it.
DoorRaise is for apartment buildings with 5 or more units. Start your deal or see pricing.
Related guides
These guides cover the next questions most readers have.
- Creator Liability in Real Estate Raises: Lessons From Cardone, Kardashian and the SEC
- A Creator's First Real Estate Raise: A 90-Day Plan From Deal to Closing
- How Much Can a Creator Raise From Followers for a Real Estate Deal? A Funnel Walkthrough
FAQ
Can I get paid for sending followers to a deal?
Only in ways a securities attorney approves. Per-investor or per-dollar pay can make you an unregistered broker, and any paid promotion must be disclosed.
What's a co-GP?
A co-general partner shares management of the deal. A real one has ongoing duties and money in the deal.
Can I promote a friend's deal for free?
You can, but your posts still can't be misleading, and you should disclose your relationship.
Do I need a license to be paid per investor?
Generally yes. A registered representative associated with a FINRA member broker-dealer, who may hold a Series 82, is the compliant route to pay per result. The exam alone isn't enough.
Sources
- SEC, guide to broker-dealer registration
- SEC staff letter, Brumberg Mackey (2010)
- Exchange Act Section 15
- Securities Act Section 17(b)
- SEC order, Kim Kardashian
- FINRA, Series 82
- DoorRaise, posting rules
This post is general information, not legal advice. Talk to a securities attorney before you structure compensation. DoorRaise is not a broker-dealer, investment adviser or funding portal.