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No. That's a rip-off. It's like having you pay to go to a job interview. Real investors know you're looking for money and, while they want to be treated with respect, they aren't looking for money up front -- they want it over the long run.
Are you sure you need investment capital at all? Usually the best way to start is boot-strapping your way to liquidity. It's a rough road, but it's just about the only road unless you have rich friends, a rich family or you know a rich fool
Are you sure that what they are actually offering -- and what you think they are offering -- are the same? This sounds like one of the literally thousands of entities that promise to do things like "accelerate your timeline for receiving business funding, and arrange a dedicated session to present your request to potential investors." Basically, for a fee, they "evaluate" your proposal and offer some generic advice, then make an appointment with an investor or loan officer -- which is all they really promised.
What happens (99 percent of the time) is you pay a fee, and they set-up a 20-minute meeting for you to pitch to a private investor (probably just a buddy of theirs who never invested in anything). You'll get turned down for funding, but having seen/heard your plan, they'll have a good idea of how much money you have to put into your new business (and you should read that as "they'll have a good idea of how much money they can get out of you"). So they'll tell you that you and your business have fantastic potential, but you just need this one service or these two improvements to make your proposal "more attractive" to lenders and investors -- which, of course, they can provide for an additional fee.
It's not a "scam" per se because they are very clear about what they are doing, and it's all spelled out in writing -- but they are counting on the business owner (who needs funding) to hear and read what he wants to hear and read.
Do not send any money. I know of two people who pitched them. The project passed the telephone interview, but after three weeks of waiting each one was informed that only 25% of the requested amount would be available. Before the funds are released you must show the 75% in your buisness account.
Thank you so much!! That all makes sense. I am not a business person, but I raised money in much the same way for an NGO so I was just thinking "our donors never asked for money" He was like "oh we have to read your proposal etc" and I'm like "youre the ones with the money!!" So those explanations were helpful in making me think of what he actually said and the possibilities of getting scammed. Thanks!
Someone asked a slmilar question in the forums (below). I just replied to this because our company was duped into paying the $250. My message needs to be approved, but they are a scam. We were asking for a $100,000 loan. They came back saying they would put up $25,000 ONLY if another lender came up with $70,000 first. If we could have gotten a $70,000 loan from somewhere else, we wouldn't need them.
These supposed "angel investors" are smearing the Angel Investor name. They, especially now, are just taking advantage of the difficulties with securing financing during these hard economic times. SPREAD THE WORD!! Check out this forum to see the e-mail they sent back to us!!
"Has anyone heard of The National Angel Investor Forum?" Check out this forum to see the e-mail they sent back to us!!
The request for an upfront payment are not all scams. Some groups do ask for a mirginal amount to cut out the riff-raft. Thus, they are not flooded with proposals that have no chance to ever get funded.
But, as shown above, there are a lot of scammers. I like the advice of knowing (actually knowing and get it in writing ) - what you will be receiving for your payment. You have to do your homework.
Also, like you have done here - ask around for others that have used them and what their experiences were - don't ask the company for referenances - do a search on your own - like you are doing here.
Best of Luck!
Business Money Today
As a businessman I know what up front fees are. Infact accountants and attorneys charge retainers, doctors ask for insurance billing information before you actually see them, but when someone you do not know asks for money it should raise a flag.
I have two clients that tried to do business with National Angel Investor Forum and found much the same as everyone here as said. Each of these two have now entered a complaint with the BBB. I hope you will also.