{"id":430,"date":"2010-09-23T10:29:04","date_gmt":"2010-09-23T16:29:04","guid":{"rendered":"http:\/\/www.abonarconsultants.com\/blog\/?p=430"},"modified":"2010-09-23T10:29:04","modified_gmt":"2010-09-23T16:29:04","slug":"watch-out-for-venture-financing-scammers","status":"publish","type":"post","link":"https:\/\/www.abonarconsultants.com\/blog\/2010\/09\/23\/watch-out-for-venture-financing-scammers\/","title":{"rendered":"Watch out for venture financing scammers"},"content":{"rendered":"

We\u00e2\u20ac\u2122ve all had the emails. Either a Nigerian prince wants to send you money or a British relative has died and willed their fortune to you. All you need to do is send a small amount of money as a sign of good faith and your fortune will be delivered in a few days. It doesn\u00e2\u20ac\u2122t take too much brainpower to know that these are scams. In the world of venture financing, these scams exist and are quite a bit more sophisticated. This blog is about how criminals try to separate you from your hard-earned money and what you can do to protect yourself.<\/p>\n

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Springfield was talked into a monorail by Lyle Lanley. Scammers bank on you not being any smarter than Homer Simpson.<\/figcaption><\/figure>\n

Entrepreneurs can be especially vulnerable to these criminals because they lack fundraising experience. The criminals take advantage of entrepreneur intelligence in other areas. One scam had a relatively low fee (about $16,000) for an incredible amount of financing ($100 million). An entrepreneur versed in statistics could determine that it only has to have a 0.016% chance of being real to be worth the gamble. This is exactly what the criminal wants you to think. Plus, once you write the first cheque, expect delays and other fees to pop up.
\nThese criminals hate when you get advice from professionals. When confronted with this, these scammers start talking about \u00e2\u20ac\u0153state-of-the-art\u00e2\u20ac\u009d financing techniques and barrage you with made up buzzwords. By doing this they are trying to discredit your expert. They want you to believe them instead of your expert. When I sat in on one of these conference calls, the scammer used an analogy of his high net worth mystery benefactor was like my rich uncle, lending me money so I could buy a car. His analogy broke down when I asked what was in it for the rich uncle.
\nThe following are some tactics used by these scammers:<\/p>\n