How to detect a fraudulent investor in business and avoid fund embezzlement- Many new entrepreneurs and small business owners lack enough fund to invest in their businesses. They look for investors to join and invest in their businesses.
Recommended:How to attract investors to your small business
This is a good strategy. But in as much as we have good and liable investors,there are fraudulent ones who could squander your start-ups. Many business owners have had lots of bad experiences in the hands of some fraudulent investors. Some were cajoled with sweet talks and promises forgetting that "when it sounds too good, it could be scam".
With the bad experiences some business start-ups have suffered and for you to be on the safe side, you have to understand how to detect fraudulent investors and protect your start-up funds.
This post is discussing the basic tips on how to detect fraudulent investors that could embezzle your start-ups and to avoid them. But before we go into details, we have to know who an investor is, the characteristics of a good and trustworthy investors you should work with
WHO IS AN INVESTOR
An investor is a person that allocates capitals with the expectation of a future financial returns. They utilize investments
with the purpose of growing their money,and provide an income during retirement such as with an anuity".
QUALITIES OF A TRUSTWORTHY INVESTOR YOU SHOULD WORK WITH.
1. PASSIONATE
Passion is a good quality of a trustworthy investor. A good investor should show interest and have passion in your choice of business. When sourcing for an investor, look out for their passionate level in your business field before working with them.
2. KNOWLEDGE
"knowledge is power". A good and trustworthy investor should be knowledgeable in your business field. He should understand the basics of the business and investing.
3. A RISK TAKER
Entrepreneurship and business is all about taking calculated risks and watching the out-come. A smart and trustworthy investor should encourage you in this. He should be the one to educate you on the importance of taking calculated risks in business.
4. HE MOVES FAST
By moving fast,i mean being trustworthy and reliable. He should be the type that says what he mean and mean what he say. He should be the type that keep up to promises and don't relent.
5. WEALTHY
Wealth made the list because business start-ups work with investors because they have insufficient funds for their businesses. A wealthy investor might be a good choice because he is unlikely to embezzle and squander your funds.
With the above listed characteristics,i trust you can easily identify a good and trustworthy investors. Moving forward,lets discuss how to detect fraudulent investors and avoid possible business fund embezzlement.
HOW TO DETECT FRAUDULENT INVESTORS AND AVOID FUND EMBEZZLEMENT.
1. GREED
The main aim of investors in businesses is to maximise their money. But an investor whose only aim is making money, who talks about making money all the time and don't talk about how to manage and grow the business is greedy and could be a fraudulent one.
2. PARANOID
A paranoid investor is one who contributes little, but mount more pressure on the business person. He mounts the highest level of pressure, but his input is very little.
3. KNOWLEDGEABLE ABOUT YOUR INDUSTRY
Knowledge is needed to succeed in business. Any investor who lack knowledge in your industry should be avoided because his contribution to the business aside money will be limited.
4. BIG EGO
An investor who have big ego and is too full of himself will not contribute well to your business. Some people's big ego are centered on their wealth and investments. Investors are allowed to bid in a business and talk about what they can contribute to the business. Any investor who discusses his/her wealth and acquisition unnecessarily should be avoided.
NOW OVER TO YOU
I have listed the basic tips and characteristics of fraudulent investors. If you have any contribution to this post, kindly share in the comment.
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