b'9. Determine How You Will Solicit Investorsone offering to new investors and the start of another is less than 12 months. Otherwise you may be considered to have engaged in un-licensed securities brokerage activities if you dont. Hiring a trans-action broker-dealer shifts this burden from your company to the broker-dealer.All Rule 506(c) advertised offerings. Some states, such as Texas and Florida, claim they dont recognize an issuers right to advertise or sell its own securities without a securities license, particularly when the issuer engages in successive offerings. Advertising will give you broader exposure and may draw the attention of securities regula-tors. In that case, a securities broker-dealer can stand between an issuer and state securities regulators, likely causing the regulators to leave the issuer alone.PAYING FINDERS TO REFER PRIVATE MONEY IS ILLEGALFor purposes of this book we will use finders to refer to individuals who wish to be compensated for referring private investors to an offering. The subject of finders was addressed in a letter from the American Bar Asso-ciation to the SEC 35 , in which the author made the following statement: Federal and state securities laws prohibit a person from being en-gaged in the business of effecting transaction in securities unless reg-istered under applicable laws. These persons must attain membership in the National Association of Securities Dealers (NASD) as well. The individuals associated with the firm must hold a series of regis-trations relating to the right to sell, to supervise and to provide financial information. There is a broad misperception in the market that there is an exception for a person who merely introduces a potential purchaser to an issuer and accepts a transaction-based fee for that introduction. This misperception, to the extent that it is supported by legal research, is usu-ally based on incorrect interpretations of what constitutes doing business as a broker-dealer and certain no-action letters. There is a further per-35 Government-Business Forum On Small Business Capital Formation, September 20, 2004, Capital FormationMaking Finders Viable, Securities and Exchange Commission, Second Roundtable Discussion, Current Challenges to Smaller Compa-nies Under Disclosure and Corporate Governance Rules. 109'