I have been raising money for over two decades and I have seen every possible scam to rob the entrepreneur of his needed cash.
The new wise guys are now guised as “Angels,” Internet Companies who advertise help to those raising capital and money finders or brokers.
While some groups and services maybe helpful, they all come at a cost to the person raising money. To me I see greedy companies who are taking advantage of young, naive and first time entrepreneurs.
Let’s talk about Angels, who tell you up front that they do not ask for upfront money but then get paid handsomely when one pays to attend an Angel Event. For example, an Angel event that seats 500 people who pay $ 65 per person, will gross over $ 32,000. Not a bad one night payday. Now I am not saying that exposure, and networking is not needed. There is a chance one may meet someone with money, however I have never met or heard of someone who actually got investment money from one of these events. I would love to be proven wrong.
The Internet help companies such as Go Big Network and the likes, allow you so sign up for Free, with big promises of large volumes of investors viewing your particular investment opportunity. A person then will get emails saying that they have investors wanting to talk with you, but there is a catch. Before you can talk with the supposed investors, the person must upgrade his membership to a paid membership, anywhere from $ 30-$70 per month. Then even after upgrading there is no guarantee that the “investors contacts” you were promised can be delivered. Understand, there is no incentive to deliver investors for your project when the internet company has you paying them membership fees on a monthly basis. Do these companies really want you to raise the money you need and then leave their services behind? The answer is no, they would rather keep on selling you fee based servies to line their pockets.
What about money finders? I have survived and raised over three quarters of a million dollars, all privately, with these simple guide lines. Be exactly who you say you are. You are only one investor away. Do your homework and never ever pay any type of front fees to anyone claiming they can find you money.
If someone truly has qualified investor contacts, they will take their compensation when they close a funding deal for the entrepreneur. In fact that person would make more money and spend less time only if they are accurate in their representations.
Time is money, and time is a, if not the most valuable asset an entrepreneur has. Don’t let anyone waste it! It is hard enough to build something from nothing without misdirection and bandits along the way. I hope this helps someone. I welcome all comments.
