Module 5 — After and Around the Raise · Lesson 5.3
Running Raises for Issuers: The Placement-Agent Desk
Two funnels, one compliance record
What you'll learn
- Describe the issuer funnel and the investor funnel and how a mandate connects them
- State the reasonable-investigation, filing and recordkeeping obligations of a member firm
- Recognise how bad-actor disqualification reaches placement agents
- Configure prospecting, handoff and archiving so the desk's record is complete
Everything in this course so far has a second reader: the professional who raises for others. For a placement agent, fundraising is the business — a steady flow of issuers who need capital and investors who might provide it, with the desk in between, paid on success and regulated throughout. The craft is the same pipeline discipline applied twice, and the difference is that every message the desk sends is a regulated communication and a business record.
Two funnels and the handoff
The issuer funnel finds clients. The desk defines the kind of mandate it wants — sectors, stages, geographies, raise sizes — ranks prospective issuers against that mandate, reaches out to the best fits, and watches for engagement: a reply, a meeting. Engaged issuers are the leads. The tone of this outreach matters, because a prospective issuer is often not raising today; outreach that is curious about the business, rather than one that assumes a raise, is the kind that earns the meeting.
The handoff is the engagement letter. When an issuer becomes a client, the mandate becomes a deal, the engagement is documented, and the deal's own data room becomes the input to the second funnel.
The investor funnel places the mandate. It is Lesson 3.4 and Lesson 4.1 run by professionals: an investment profile read from the issuer's materials, a ranked list of investors by thesis, stage, geography and capacity, tranches released and worked, and every firm marked approached or dismissed. A desk running several mandates at once needs each of these funnels to keep its own record, because the same investor can be approached on three deals in a month and must not be treated as if each were the first.
Diligence before recommendation
A broker-dealer may not simply pass an issuer's claims through to its customers. FINRA's Regulatory Notice 23-08, issued in May 2023, reminded members of their obligation, set out in Regulatory Notice 10-22, to conduct a reasonable investigation of an issuer before recommending a private offering. A reasonable investigation independently verifies the issuer's material representations and claims; red flags call for further inquiry, and red flags a member's own review finds must be addressed before the offering is recommended. The notice lists practices such as obtaining primary documents from the issuer.
The desk's diligence also covers people. Rule 506(d)'s bad-actor disqualification reaches beyond the issuer to covered persons including any person paid, directly or indirectly, for soliciting purchasers in the offering — which includes a compensated placement agent and its relevant personnel. A disqualifying event at the agent can make the exemption unavailable for the issuer's whole offering. Desks check their own covered persons as carefully as the issuer's.
Filings and records
Two obligations follow every placement.
FINRA Rule 5123 requires a member that sells securities in a non-public offering covered by the rule to submit to FINRA a copy of any private placement memorandum, term sheet or other offering document, and any retail communication used, within 15 calendar days of the date of first sale — or to notify FINRA that no such documents were used. The rule exempts several categories of offering, including those sold solely to specified institutional and other qualified purchasers; which apply is a question for the firm's compliance function.
Recordkeeping is the larger obligation. SEC Rule 17a-4(b)(4) requires broker-dealers to preserve originals of all communications received and copies of all communications sent relating to the business as such, for not less than three years, the first two in an easily accessible place. FINRA Rule 4511 requires members to preserve FINRA-required books and records for six years where no other period is specified. Whatever system a firm uses to meet those rules, the practical consequence for a desk using any software to run outreach is simple: if a message leaves the desk, a copy must reach the archive, and a tool that sends without one is a compliance gap however good its outreach is.
What the desk's system must guarantee
Put those obligations together and a desk's tooling has to guarantee four things. Every outbound message, from any person or automation, reaches the archive — and a message that cannot be archived is not sent. Opt-outs and bounces stop mail at the wire, including steps that were scheduled before the opt-out arrived. Personalisation is factual, because a false statement in a solicitation from a regulated firm is a misrepresentation. And the record shows who did what: which firm was approached on which deal, by whom, and when.
None of that makes outreach software the system of record. The firm's archive is. The software's job is to make sure everything gets there and that nothing leaves that should not.
Wire both funnels and the archive
- 1
Define the mandate and rank issuers
Ask the agent to create an issuer campaign (upsert_issuer_campaign) with the mandate — themes, sectors, stages, geographies, raise range — and rank prospective issuers against it (rank_issuers_for_campaign). The Issuers view in /deals shows campaigns and their matches. Editing a mandate sends nothing.
- 2
Start outreach with a network cadence
start_issuer_campaign enrolls the best person at each released firm into a network cadence — confirmed with you first, because it arms outbound mail. The issuer-curious cadence template is written to learn about the business rather than assume a raise; network cadences always carry an unsubscribe. A firm becomes engaged when someone there replies or takes a meeting.
- 3
convert_issuer_to_deal turns an engaged issuer into a deal and links its contacts. From there, workspace automations can send the engagement letter on a stage change (send-engagement-envelope) and start the investor campaign when the signed document completes (deal-document-signed with start-investor-campaign).
- 4
In Settings → Audit logs → Archiving, the workspace owner sets the archive address and turns compliance mode on. Every outbound email then carries the archive BCC — a send that cannot carry it is refused — and what people say inside Kavanah is journaled for delivery to the archiver.
Desk health
- Engaged issuers per tranche
- Issuers that replied or met, divided by issuers approached, per released tranche.
- Healthy signal: Compare across campaigns and cadences. A Kavanah suggestion: a mandate that produces no engagement after two tranches needs a different list or a different message.
- Mandates converted to placed capital
- Share of signed mandates that close a raise, and days from engagement letter to first close.
- Healthy signal: The desk's real conversion rate; track it per sector and size.
- Outbound messages archived
- Share of outbound messages from the workspace that carried the archive copy.
- Healthy signal: 100% with compliance mode on — by construction, since a send that cannot carry the copy is refused. Anything less means mail is leaving through a channel outside the workspace.
Key takeaways
- ·A desk runs an issuer funnel to win mandates and an investor funnel to place them; the engagement letter is the handoff.
- ·A member must reasonably investigate an issuer — verifying, not repeating, its claims — before recommending the offering.
- ·Rule 5123 filings are due within 15 calendar days of first sale; communications must be preserved under Rule 17a-4 and FINRA Rule 4511.
- ·Bad-actor disqualification reaches paid placement agents; check your own covered persons.
The last lesson draws the course together around a question every desk and many founders now face: how much of this work to hand to an AI agent, and how to govern it so the record stays clean.
Sources
- 1.Regulatory Notice 23-08: FINRA Reminds Members of Their Obligations When Selling Private Placements
FINRA · FINRA Regulatory Notice (May 9, 2023) · 2023
The reasonable-investigation obligation from Notice 10-22; independent verification; red flags addressed before recommending; obtaining primary documents.
- 2.FINRA Rule 5123 — Private Placements of Securities
FINRA · FINRA Rulebook (as published October 2026) · 2026
Submission of offering documents and retail communications, or notice that none were used, within 15 calendar days of first sale; exemptions including offerings sold solely to specified institutional and qualified purchasers.
- 3.17 CFR 240.17a-4 — Records to be preserved by certain exchange members, brokers and dealers
U.S. Securities and Exchange Commission (eCFR) · Electronic Code of Federal Regulations, up to date as of October 21, 2026 · 2026
Preservation of communications received and sent relating to the business, for not less than three years, the first two in an easily accessible place.
- 4.FINRA Rule 4511 — General Requirements (Books and Records)
FINRA · FINRA Rulebook (as published October 2026) · 2026
Six-year preservation of FINRA-required books and records where no other period is specified.
- 5.17 CFR 230.506 — Exemption for limited offers and sales without regard to dollar amount of offering
U.S. Securities and Exchange Commission (eCFR) · Electronic Code of Federal Regulations, up to date as of October 21, 2026 · 2026
Rule 506(d) bad-actor disqualification and its covered persons, including any person paid for soliciting purchasers.