An in-house corporate development team gives continuity but is costly for a startup; a placement agent is engaged per raise; a fractional corporate development partner covers fundraising, investor relations, diligence readiness, and M&A on an ongoing basis. Whatever the model, anyone paid to solicit investors in a securities offering should be a registered broker-dealer or act through one.
Key takeaways
- In-house: maximum continuity, highest fixed cost.
- Placement agent: transaction-specific, usually success-fee based, ends at close.
- Fractional corporate development: ongoing strategy, investor relations, diligence, and M&A without a full-time team.
- Check registration for anyone compensated to raise capital.
The problem being solved
Raising capital is a full-time job that competes with the full-time job of running the company. Large companies solve this with a corporate development function that keeps corporate finance, capital raising, M&A, and investor relations aligned. Growth companies have three main options.
Option 1: build in-house
A dedicated VP of corporate development or finance team offers continuity and deep company knowledge, but it is a fixed cost that is hard to justify before a company has steady transaction volume — and a single hire rarely brings an institutional investor network with them.
Option 2: hire a placement agent per raise
A placement agent is engaged for a specific offering, typically on a success fee. It brings investor access for that raise, but the relationship usually ends at close, so investor relations and preparation for the next round restart from scratch. Most Regulation D offerings use no intermediary at all; when one is used, FINRA economists find broker-dealers concentrate in larger deals sold to accredited investors [1].
Option 3: fractional corporate development
A fractional model embeds an outside team as the corporate development function on an ongoing basis — capital strategy, fundraising, data-room readiness, investor relations, and M&A — so decisions stay consistent from one round to the next without a full-time payroll.
The regulatory line
Whatever the model, anyone compensated for soliciting investors in a securities offering should be a registered broker-dealer or act through one; the SEC directs issuers to FINRA BrokerCheck to confirm registration [2].
Frequently asked questions
- When does a startup need corporate development?
- Once capital raising, investor relations, and strategic transactions start consuming founder time that should go to operating the business — often ahead of an institutional round.
- Is fractional corporate development the same as a placement agent?
- No. A placement agent is typically engaged for a single raise; a fractional corporate development partner runs the function on an ongoing basis, including strategy, investor relations, diligence readiness, and M&A.
Sources
- [1]FINRA Office of the Chief Economist, “The Roles of Broker-Dealers in Regulation D Offerings, 2013–2022 (Li, Makaew, and Walsh),” January 24, 2025.
- [2]U.S. Securities and Exchange Commission, “Broker-Dealers — Capital Raising Building Blocks,” Accessed November 2026.
How Baird Augustine helps
This article is for informational purposes only and is not legal, tax, or investment advice, or an offer to sell or a solicitation of an offer to buy any security. Regulatory proposals described here may change before adoption. Securities offered through Umergence LLC, Member FINRA/SIPC.
