How It Started
On June 18 2021, we got a missed call on or Business WhatsApp from a UK Number; we use that number only for customer service.
We texted back and asked how we can help.
Very fast, the person introduced himself as Mr H. He asked if we could get on a phone call to discuss potential investments in my company.
The same day we had our phone call, all went very well. Mr H. asked the right questions, explained their business, how they work. Then, he asked me to send him our pitch deck, which I did. You know the traditional questions you expect from a serious fund.
I checked their website; they had a link to the Company House register where you could see they exist since 2012. So all seems to be ok.
They told me the deal would be 10MM for a valuation of 50MM (2x more than I am raising). The deal had to go relatively fast, as their client had a tax issue and needed to invest the money before mid-July 2021.
Before you sign a deal of 10MM, you need to meet in person, and they asked me to join them in Barcelona. In Barcelona, I was going to meet the financial director Mr J. and his assistant.
Meeting in Barcelona
I flew to Barcelona to meet them. All was arranged, no cancellations, and yes, I met the people in person.
With a few questions about my vision, the meeting started promising—questions like how I want to sell the company, in VC terms, and your exit strategy.
Then it started to get strange..... They started talking about Bitcoin, and bitcoin and bitcoin. Our company is not into bitcoin, and I even explained our bank in Switzerland doesn't want us to work on Bitcoin.
Every time I wanted to come back to our vision, our numbers, it seems they were not interested.
I was getting nervous; I asked what the conditions are for the investment deal. At that moment, they started to talk about their "Management Fee"; it had to be paid in cash or Bitcoin.
🚩 Red Flag #1 => Bitcoin was serious crashing at that moment.
The conditions were: I need to bring 500K in Swiss francs, Cash to Barcelona or send it by Bitcoin. On the same day, they will give me 1MM cash in EUR, and the week after, the other 9MM will be transferred by their client to my company account. In year 2, they required another 500K as Management Fee.
They wanted to make sure they will receive 500K as a Management fee first, as a sign of trust. 🚩🚩That was a BIG red flag, and I became rather angry, as I told them a management fee can be discussed, but no payment upfront.
We separated, and the day after, they called me back. They had another proposal, as they felt I was not particularly eager to travel with 500K to Barcelona. That part was right, but I was also not particularly keen to take out 500K from the company account upfront neither.
They proposed that I take the 500K cash, bring it to a hotel room where someone will count it, and when the 500K is correct, they will send the 10MM to my account. Once the 10MM is on my account, I will give the 500K in cash again in a hotel room.
I am a startup entrepreneur, not a Hollywood movie star. But, of course, if I would have accepted the offer and filmed as "the daily life of an entrepreneur", I am sure my YouTube channel would have become an overnight success.
Let's Play a Little Bit
Meanwhile, I researched and came across a US government website on Advance Fee Fraud. It seems I was not alone. It happens more than we think.
Also, the UK has a hotline if an unauthorised firm has approached you or a scammer is trying to con you into sending an advance fee for a loan.
To make it more interesting, I even found companies claiming they will recover your funds in case you felt for the trap, probably with a starting fee upfront after your free consulting.
As you know from my previous videos and channels, I had some encounters with the mafia before.
So I started to play around and proposed something else; I offered them to send 1MM to the business account; once I received the payment, I pay them 500K in their bitcoin as a Management fee, and when all is fine, they can send the 9MM of the client.
You can imagine they refused. In this case, the wannabe investor couldn't fraud me.
I got a message that the deal was off, me losing 10MM. Or should I say me NOT losing 500K?
The story is real and happened last month, and no, I didn't get the fake investment, and no, I was not scammed.
When discussing investment deals, never, yes never, pay a management fee or any other fee upfront.