Avoiding Angellist Scams and Investment Frauds

Investing on AngelList can be a great way to support startups, but it's essential to be cautious of scams and investment frauds.

Many scams involve fake startups or exaggerated claims about a company's potential.

Be wary of startups that have no clear business plan or product, or those that make unrealistic promises about returns on investment.

Some scammers may even create fake profiles or use stolen identities to make their startups appear more legitimate.

Always research the startup and its team thoroughly before investing, and look for red flags such as poor communication or inconsistent information.

If a startup seems too good to be true, it probably is.

Additional reading: Gold Investment Scams

Be cautious of investment opportunities that seem too good to be true, as they often are a sign of an AngelList scam.

Red flags include unusually high returns promised with little to no risk.

Some scammers use fake profiles and fake companies to lure investors in.

Be wary of companies that have no real product or service, but promise huge growth potential.

Legitimate startups usually have a clear business plan and a team with relevant experience.

AngelList scams often target inexperienced investors who are eager to make a quick profit.

Be cautious of investments that require you to send money upfront, as this is a common tactic used by scammers.

Be cautious of unsolicited messages from AngelList, as they can be a sign of a scammer trying to get your personal or financial information.

The platform's lack of regulation and oversight can make it difficult to track down scammers, so it's essential to be vigilant.

Legitimate startups on AngelList often have a clear and transparent pitch, whereas scammers may use vague or overly promising language to lure you in.

Never invest more than you can afford to lose, and make sure to do thorough research on the startup and its founders before investing.

Scammers may use fake profiles or stolen photos to make themselves appear more legitimate, so be wary of any red flags.

AngelList's own terms of service state that they are not responsible for any losses incurred by users, so it's up to you to protect yourself.

If you think you've been scammed, do your research before taking any action. Scammers often try to rush you into making a decision, so take your time and verify the authenticity of the investment opportunity.

To avoid scams, it's essential to be cautious and do your due diligence. One way to protect yourself is to arrange a video conference call through Skype or Zoom, as scammers often prefer phone calls or emails. Scammers may also ask you to prepare documents or pay fees, but don't fall for it – legitimate investors will not ask you to do this.

If you've been scammed, report it to the website where the fake listing was posted, the FTC, and the Better Business Bureau. You can also alert local law enforcement and your state attorney general. Be sure to protect your identity and finances by alerting the company through which you made the payment and checking your bank and credit card statements for any fraudulent purchases.

Be cautious of scammers on platforms like Angel List, who may propose loans or funding opportunities that seem too good to be true.

They might ask you to prepare a surety bond and pay a fee to a fake website, like www.boasuretybonds.com. Skip this.

Scammers often propose video calls, but prefer phone calls instead. Don't fall for it – insist on a video conference call through Skype or Zoom.

Check the sender's email domain, as reputable VCs and asset managers won't send important requests from @gmail or @yahoo.

Verify the company name and contact person's page on Google and social media networks. Their contact information should match what they provided.

If you're unsure, send a direct request to the person or company to confirm the investment opportunity. If they don't respond, it's likely a scam.

Never sign off on documents or send money to prepare them. Meet with potential investors first.

Here are some key red flags to watch out for:

Viewing AngelList Job Searches can be a bit tricky, but it's a good idea to claim your listing for free to respond to reviews, update your profile and manage your listing. This will give you more control over how your job search history appears on the platform.

If someone is suspicious of a job search on AngelList, they can claim their listing to review and verify the information.

Claiming your listing is free, so there's no reason not to do it.

If you see a scam, do your research before applying by calling the company and looking up their contact information online. Google the company and check if it's legitimate.

Report the scam to the website where the fake listing was posted, the FTC, and the Better Business Bureau. You should also alert local law enforcement and your state attorney general.

If you paid a scammer, alert the company through which you made the payment as soon as possible to try and recoup funds. Credit and debit cards have chargeback rights, and funds sent through gift cards or wire transfer may be able to be blocked.

You should also place a freeze on your credit reports from each major company to prevent other accounts being opened in your name. Check bank and credit card statements for any fraudulent purchases and report them right away.

Lastly, warn others in your network who may come across the same posting by sharing your experience. This can help process the situation and prevent others from falling victim to the scam.