How To Spot a fake Vc guidelines to help as you navigate your fundraising efforts !

Fake ‘’Venture capitalist ‘Are Running Roughshod Over the Venture Capital Industry .

With the growing number of startups , their are also a growing number of opportunist

Looking to fleece unsuspecting first time founders . To make matters worse the startup and Venture Capital world is very unstructured. This makes things often befuddling to people looking for a clear, structured path to. VC funding .

This has lead to an explosion in so-called professional services being packaged and sold by snake oil salesman to startups , marketing themselves as VCs or family office representatives who never have even written a founder a check .

These individuals not only contact startups they have the nerve to contact the investors of these companies also. I have been contacted by a number of individuals peddling this nonsense.

Some common red flags

1. People who invest or have raised money don’t know who the heck they are.
2. When asked every legit Vc , Angel or founder says “yes I know them” and not much else .
3. They advertise on their LinkedIn and other profiles as family office or venture capital investor followed by a long list of nonsense about their rolodex etc.
4. When you ask what companies they. invested in they claim they are doing amazing things behind the scenes with no answer to the who they invested in.
5. The whole conversation is about who they know and how credible they are .

If you’re raising money… make sure you do a reference check on all potential investors. Use legit investor data bases Angellist and even Google searches . Once an investor passes the initial sniff test. For the love of God do at. least a couple of founder reference checks.

Before meeting with this potential investor .

I have heard that many accelerators have their own slack Channel making it very easy to ask a founder in the network about a certain investor .

At the very minimum do a Google search if this investor is not in the network.

Keep in mind that every good investor may not necessarily be a fit for your company .

A founder should always want to know if the potential investor is going to bring more than capital to the table. Do they share the same vision. Why is this potential angel , family office, private equity firm or even a top tier venture firm the right fit for you .

Often times the partner at the firm you are working with can make a difference in your experience and relationship with that firm .

At the end of the day , “the good investor work for the founders the bad investors think the founders work for them .”

One of the first conversations we have with entrepreneurs is really aligning on what are your dreams, what does success look like for you, what do you want this business to be and then trying to think about what are the right ways to capitalize your business.