How To Avoid Fraudulent Investors And Likely Embezzlement As Startups
Startups will always need investors from all works of life and this has cost many people their bright ideas and made other people very great and successful. For you to be on the successful part, you must understand how to avoid fraudulent investors and likely embezzlement.
I want to tell you that it is not every investor that is worth your time. You will find the good ones and the bad ones but how you handle them will go a long way in defining the success of your company.
There is something you need to know. When it all sounds too good, you have to stop and ask questions and try to find out the cache for the good stuff you are receiving.
Related: How successful people handle bad bosses in Nigeria
Giving the experiences of many startups in the hands of fraudulent investors, we have come up with the idea of educating you on how to avoid fraudulent investors and likely embezzlement when starting up a company.
To achieve this end, we will have two sections to discuss the negatives and the positives. The negatives will consist of characters you will look out for if you want to avoid fraudulent investors and likely embezzlement.
On the other hand, the positives will discuss traits that will enable you to make up your mind about the intentions of the would-be investors.
You should note that some people are very good at concealing their real intentions. These are the people that this piece might not help you unravel but just be wise. In the grand scheme of things, you will always know.
Apart from these special people, this piece will guide you on how to avoid fraudulent investors and likely embezzlement.
Related: The best way startups should prepare for investors
The Negatives: Behavioral Pattern To Look At For To Enable You Avoid Fraudulent Investors And Likely Embezzlement
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Very Greedy
When the investor shows that all he wants is to make money, beware. We are not saying that investors shouldn’t care about making money, after all, that is the very reason for investing. It becomes an issue when all the person cares about is money.
The investor has no interest in the way the company wants to run itself, the team members and the general objectives of the company. Beware because this investor is one of those to avoid.
2. Unnecessary show of Wealth
By a show of wealth, we mean men who attend meetings to talk about how rich or wealthy they are. Money and wealth speak for itself that it doesn’t really need you to do an advertisement for it. When you are with investors who act like that, you have to watch it and be careful with them. They could be frauds.
In the event that there is a competitive bid by investors, it wouldn’t be out of the ordinary for investors to try to prove themselves by talking about what they can give. This is the exception.
3. Doesn’t know the industry
To avoid fraudulent investors and likely embezzlement, you will need to look out for investors who don’t really know the industry. Frauds may not know the industry very well and they will just be beating around the bush. Stay clear.
4. The Paranoid
To avoid fraudulent investors and likely embezzlement as a startup, you will need to avoid the paranoid. The paranoid gives you a very little amount and surprisingly gives you the highest level of pressure. His input doesn’t match the pressure he mounts. You waste a lot of time on this kind of investor.
Also read: Tips on how you can get the best investors to invest in your business
The Investors You Should Really Partner With
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Wealthy
The wealthy investor is always a welcome development and to avoid fraudulent investors and likely embezzlement, you should work with them. These people are not wealthy because they told you so, their assets always speak for them.
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Very Passionate
When you see an investor that really wants to partner with you and is passionate about what you do and the company you want to start, you should always work with them.
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He moves fast
The right investor moves very fast. He makes promises he can keep and goes on to fulfill those promises within the shortest possible time.
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Knowledgeable
The right investor has good knowledge about the industry you want to venture in and also understands the basics of investing.
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Risk-tolerant
Business is a risk and every entrepreneur takes risks. The right investor understands this and even encourages you to take calculated risks in whatever field you want to venture in.
These tips above will help you to avoid fraudulent investors and likely embezzlement. They are not sacrosanct but they can help out in your dealings with investors.
