Promoter

What is a 'Promoter'

A promoter is an individual or company that, for a fee, helps raise money for some type of investment activity. Most often, promoters raise money for a company through offering investment vehicles other than traditional stocks and bonds, such as limited partnerships and direct investment activities. Often times, these promoters are paid in company stock or free entrance into the investment activity as compensation for their work in raising funds from others.

BREAKING DOWN 'Promoter'

While there are plenty of legitimate investment promoters out there, one should always do their homework before investing in the activities they represent. Due to the fact that many of the investments promoted by these individuals are not formally registered with the Securities and Exchange Commission, an investment area plagued with fraud, professional promoters have been linked to an inordinately high number of investment scams and litigation.

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