Once again, I agree with Foz. In the example you provided, the issue is not that you have the leads (or whether you paid for them), but what you do with them. Foz is also right on target in his advice to pay attention to the blue sky requirements.
Check out Section 203(b)(3) of the Investment Advisers Act of 1940. This is a an exemption section of the Act. It is what most hedge fund managers rely on to be exempted from having to register as an Investment Adviser at the federal level (state rules can be very different). See the code section here:
http://www.law.uc.edu/CCL/InvAdvAct/sec203.html. The part that relates to what you are talking about is the Holding Out section.
Here is some interpretation:
(1) A person is holding himself out as an adviser for purposes of Section 203(b)(3) if: (1) he uses the term investment adviser or similar term on a business card or stationary; (2) is listed as an investment adviser in a telephone, business or building directory; or (3) lets it be known generally by word of mouth or otherwise that he is available to provide investment advice or will accept new clients.
(2) Using a publicly available electronic medium, such as a World Wide Web site, to provide information about an adviser's services would also be considered holding out. An investment adviser that posted only information about private funds (structured as domestic or foreign partnerships, limited liability companies, trusts or other entities) on a restricted access web site would not be holding itself out generally to the public.
(3) Any investment adviser relying on the private investment adviser exception is not deemed to be holding itself out generally to the public as an adviser solely because the investment adviser participates in a non-public offering of interests in a limited partnership under the Securities Act of 1933. Thus, the mere act of identifying a partnership's adviser in a private placement memorandum is not considered holding out for purposes of Section 203(b)(3).
Assuming you use the leads to send out a bulk e-mail, I suspect that you would be deemed to be holding yourself out as an Investment Adviser, and that you would have "blown" your exemption. That is not something that you want to do.
If your friend introduces you to his acquaintances (not for the purpose of "selling" your fund to the acquaintances), and you end up developing a relationship with them, it becomes a different situation. If you have a relationship with them, they are fair game. But that tends to be a long-term strategy that may not turn into an investor for you for several years.
Good luck with your fund. You are up against what many hedge fund managers face. If you understand the rules going into the process, it is fine. But it can be a problem if you find out after the fact.
It is my opinion that a lot of funds do not pay nearly close enough attention to these rules. I hope their actions do not come back to bite them.
