Fee based VP structure

Yikes! There is little need to do this. People that are trying to do stuff like this do so because they are desperate. First, "receive incentives for raising capital" is a MAJOR broker dealer violation. Second, a $5k investment is not worth your time (do the math of 2% for $5k). Third, the kind of people that can only invest $5k in a fund typically will struggle to help GPs because their networks rarely contain people that can invest $500k in a fund or that would use their investment as a 'signal' for quality.

Thanks, Mike. I didn't even think about the unlicensed broker/fee part. I was only thinking about how they are having their 70 VPs do the work for them - they source deals, do all the diligence, and also provide them 10K LPs in their network. Often these LP/VPs are using their Roth IRA. smh.
The fund is use companies logos of where their LPs and VPs work as a reflection of their team's expertise. I looked at their VPs profiles on linkedin, and they listed many similar type of funds/syndicates and as investor to all (many) of their portfolio companies - typical of Angel List investors. 

There were a lot of red flags. Their target is $30M and have soft circled $10 M, and will close with $5M in Aug. Their min check size is $10K so they need somewhere around 3000 LPs or so.
They have 35000 in escrow (I guess that is 70 partners pay to play). They have made 3 SPV investments of about $100k-200K check size. Only one of their portfolio company has listed them as their investor. As a way to make their VP role attractive, they say they will help the partner be on the board seat. I think most their target archetype VP clients would fall for it, because many of them want to put things on their linkedin :)

I was referred to them by someone I know who has little understanding of VC operations. Thanks to VC lab - I was able to assess them :)