Beware of Venture Capital Brokers
Venture Capital Brokers (a.k.a., Money Middle-men, Money Finders)
What is a Venture Capital Broker?
A venture capital broker is someone who offers to raise venture capital on behalf of a client company. They do not invest their own money. Rather they promise to raise capital for your company and expect to be paid a fee for their services. As a result, it’s best to utilize the services of a broker who won’t ask to be paid unless he is successful in raising any capital. Never pay up-front fees of any kind to middle-men.
Dealing with a venture capital brokers requires extreme care so as to insure that you are not swindled.
Scams To Watch Out For: The Up-Front Fee & Agreement Scam
If you are talking to venture capital brokers, you will most likely be asked to pay a large up-front fee before any financing has been secured. This is their way of testing to see if you’re what is technically called a “sucker” or “rube”.
The broker may call it a finders fee, processing fee, placement fee, or credit application fee. To maximize your probability of following through the broker will ensure that you have first sunk significant time and effort into the deal. Before being asked for any fees you will be required to complete a mountain of paper work which will includes credit applications, references, co-signers, as well as undergo numerous interviews with the broker, while the mystery investor or lender remains anonymous.
Once you have invested substantial time and effort into the application process, you will hear back from the broker that the financing is in place but that you must first purchase insurance to insure the loan or the financing. This is the insurance fee scam.
Even though you will be told the fee is completely refundable if the financing falls through, you will have trouble recovering it. A court judgment against the broker will do you no good if he lacks the assets to pay you back. Rest assured that his “firm” will always turn out to be asset-less.
There are thousands of con-men who make their living by extracting these fraudulent fees from businesses desperate for capital. They will use agreements with unconditional clauses buried deep in the fine print which leave you with no escape recourse once the bad news comes in that your deal has fallen through. The agreements will contain hundreds of reasons why you can be denied independent financing under the contact and still be legally bound to pay the broker’s fees.
This processing fee scam has gotten so bad there has been new legislation written in many States and Provinces to protect consumers from them. This scam is most commonly found in the mortgage broker and loan broker field.
To protect yourself do the following at the outset:
– Ask the broker for at least ten references. These are to be companies which he raised money for. Be sure to call these references and verify his claims.
– Be leery of brokers who use free email services such as Yahoo or Hotmail or even AOL. Legit service providers should have their own domains.
– If the broker looks legit insist that any and all fees be held by your lawyer until the funds are securely in your bank account.
Looking for someone to hlep me raise money to get this project going.
Hi I need to raise an investment of $3 Mil for a shipping and Logistic company and a Real estate business.
I need a loan amount USD Three Million for my real estate and Agriculture business purpose. please contact me through my email id- email@example.com, firstname.lastname@example.org
I Designed a new energy system, went to World Patent Marketing (WPM), scored highest on their research, finalized Phase One. Now after all details are professionally detailed in a book designed by WPM, including Sales Expectations by Home Depot @ $186M in a two year period, a two year 90% – 10% Spit with WPM, I am charged in the final phase in order to make all this a reality, by finding an Investor.
I have closed my company after 25 years of great contracts with the military, also where I originally found my idea from, started my company from scratch, will be able to put this new company up and running quickly once the funds are in place.
What ever Investor is Blessed helping to put this together, will make an Investment of a Life Time, and this is coming from World Patent Marketing along with several others that have been involved in one way or another having NDA’s, plus wanting to be involved in anyway I am able to place them.
Contact Me if your Interested in making this Work.
J Michael Gonzalez
Hi’ my name is Ernie Wilkins,
My areas of expertise is “Marketing & Research” to find the highest and best use for all kind of properties. I’m now 82 years old and have given up my Real Estate Broker License over 20 years ago but still have clients that ask for assistance with difficult properties to sale.
I was contacted by the owner of a 433 Acre Parcel located near “Yosemite National Park” He visited me at my home to discuss a way to sell this property, he is asking $4,800,000.
After researching the zoning’ I discover this property is “Zoned MT” (Mountain General Zone) and also there is a “Timber Exclusive Zone” that permits The Forrest Service to cut the over 900,000 dead trees in the Yosemite Forrest and haul them out using a road connected to this property.
Since there is no “Identifiable Income Sources To Support $4.800.000” I found it to be impossible as a straight land sale.
Working with the “County Planning Department” I developed a plan using the 6 million Visitors that pass this site each year going to and from Yosemite National Park (On Vacation from all over the world) some with families (Kids) and no recreation to prepare for the 4-5 hour trip back to either San Francisco/Sacramento/Los Angeles. (Nearest Air Port To Return Home).
Initially’ after meeting with the property owner I explored the concept of putting an amusement park on the site since it will be the “ONLY” amusement site located within 3-400 miles. This was not accepted because the present rules do not allow a standalone amusement park.
I had to design a plan that would conform to the “Mountain General Zone (MGZ) and identify several income streams such as:
1. The Five (5) lake area’s with sand brought in could become a “Beach & Broad walk Area” with limited development (Using Natural Environmental sources)
2. Public Horse Riding Trials’
3. Sigh Seeing “Trails” Using People Movers
4. Limited Amusement Rides
5. Souvenirs and AG Products
Without going into details the concept will be to have a minimum of “Only Six Buses” – Morning & Six In afternoon or Evening totaling only 12 Buses Daily.
Each Bus will carry 60 people
X 7 days
X 30 Days
Projected Estimated Income”
If Each Visitor spend only $6.00 Per Person
Daily $6.00 X 720 = $4,330.00
Weekly $6.00 X 5,040 = $30,240.00
Monthly $6.00 X 151,200 = $907,200.00
Annually $6.00 26 Weeks $5,443,200.00 (Semi Annually)
Note: Amusement Business Reported Average Victor Spend $12.00 – $22.00
There will also be a huge tax incentive by continuing to allow Churches – Schools & Other Organized Non-Profit Groups to Use the Camping & Existing building. (I’ll explain when you call)
236 Castle Vista Dr.
Atwater, Ca. 95301
If there is interest please reply for additional information, thanks