How’s it going, everyone? Today, I want to teach you how to identify fraud in 2023!
2 years ago, I told my friends to get out of a certain investment opportunity because I thought it was a scam… and it was!
They thanked me and asked me how I was able to identify the scam before it surfaced… so here’s my answer!
I’m going to walk you through my due diligence process when I am pitched by anyone.
“Why are you coming to me?”
This is the first question I ask them. I want to know why they picked me over someone else.
I am not a popular or even a known investor, so I need to find out why the deal is coming to me.
Take the Bait
This tactic doesn’t seem intuitive, but I like to hear out all deals.
Even if I think the deal is fraudulent, I agree to hop on the zoom call.
After their pitch, I ask them about their motive.
For example, why would a random dude sell all of his bitcoin at a 20% discount? No one would do that.
If you can’t get a clear answer of what the motive of the deal is, then the deal is probably fake.
Meet the team
2 years ago, I was pitched by multiple people for a certain fund.
The premise was that someone created a bot that traded all day and made incremental gains.
The returns people were getting from this were huge!
However, like I said in my video, I thought…
“If this bot is so good, why am I hearing about it from my friends and family? If this bot was legit, it would be running a huge hedge fund on Wall Street, not attracting small players.”
I decided to “meet the team.” I tried to run background checks on the people working in this fund and I couldn’t find any information!
As I’m telling you this, you may think, “Well, of course this fund is a scam.”
But, it’s easier to say that in hindsight. I have friends that put up to $20m into this scam!
Why? Because they fell in love with the end result.
Never write the check in your brain before you do your due diligence.
It’s easy to get carried away and invest your money irresponsibly when all you consider is the possible reward.
First, run your due diligence and see if everything makes sense.
Fact check everything they said in their pitch deck. This includes the following:
- 3rd party audits
- money raised
- 3rd party administrators
- SEC filing
- FINRA filing
- and more
So, this is how I identify fraud in 2023.
I want to know why the deal is coming to me, what their motivation is, and what their investment team is like.
I also perform all due diligence as mentioned above.
I hope this helps!
Want to get direct guidance for your fund? Schedule a time with my Fund Advisors!
DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the author