Asset raising and marketing are fundamental, life or death activities for hedge fund managers.  If you as a hedge fund manager (or your agents) cannot market effectively, you cannot survive, regardless of your investing prowess.  According to Rothstein Kass’ sixth annual hedge fund industry outlook survey, released in April 2012, “asset raising and marketing are far and away the top issues for funds in 2012, with 53.1 percent of respondents stating those are their biggest concerns.”  Hence the robust pay packages of the top in-house and third party marketers.  See “How Much Are In-House Hedge Fund Marketers Paid?,” Hedge Fund Law Report, Vol. 4, No. 20 (Jun. 17, 2011).  Marketing in the hedge fund industry is tough for business and legal reasons.  Hedge fund marketing is tough from a business perspective because, among other things: the sales cycle is long; investors have many choices; investors – especially big ones – have considerable bargaining clout; hedge funds are typically relatively liquid (and where they are not, big investors typically negotiate for liquidity); investors rarely provide feedback when they decide to forgo a hedge fund investment, so it is difficult to learn from your mistakes; it is often challenging to clearly articulate a complicated value proposition; etc.  Hedge fund marketing is tough from a legal perspective because the activity is subject to a dense and often opaque patchwork of law, regulation, policy and practice including – but by no means limited to – lobbying laws and rules and related compensation restrictions; performance reporting considerations; due diligence best practices; the JOBS Act and the evolving rules regarding general solicitation and advertising; the AIFMD in Europe; heightened and focused SEC enforcement activity; general contracting and structuring considerations; registration issues; etc.  In an effort to provide guidance to industry participants trying to navigate the business and legal challenges involved in hedge fund marketing, on April 4, 2012, the Third Party Marketers Association hosted a webinar entitled “The Transformation of Third Party Marketer Contracts and Compensation.”  The participants in the webinar were Matthew Eisenberg, a Partner at Finn Dixon & Herling LLP; Laurier W. Beaupre, a Partner at Proskauer Rose LLP; and L. Charles Bartz, a Partner with placement agent BerchWood Partners LLP.  The webinar was moderated by Mike Pereira, Publisher of the Hedge Fund Law Report.  The webinar covered many of the most important issues involved in structuring relationships between hedge fund managers and third party marketers.  This is our first of two articles covering the webinar.  This article summarizes the specific insights and concrete recommendations of the panelists on topics including: the JOBS Act; separate accounts; due diligence; who bears the risk of public plan-level restrictions on compensation; disclosure; looking through funds of funds; and other topics.