What are the most common scams targeting founders?
The most common scams aimed at founders are fake investors who charge fees, impersonators posing as real investors or firms, fake co-founders who harvest ideas or free work, and phishing for documents and account access. They look different on the surface, but each one depends on you skipping a verification step.
| Scam | How it usually looks | The tell |
|---|---|---|
| Fee-charging "investor" | Quick enthusiasm, a term sheet, then a request for a fee | Money flows to them before any flows to you |
| Advance-fee "due diligence" | Pay for a valuation, legal review or escrow setup by a provider they choose | Unknown provider, fixed fee, tight deadline |
| Impersonation | A real investor's name and photo on a new account or lookalike email domain | The channel does not match the firm's own website |
| Fake co-founder | A "perfect fit" who wants your plan, code or customer list early, then disappears | Many questions about your assets, few verifiable facts about them |
| Document phishing | A link to upload your deck and ID, or to sign in to view a file | The link asks for a password or login code |
| Paid "guaranteed" access | Investor introductions or funding promised for an upfront fee | A promised outcome in exchange for money now |
Advance-fee fraud is one of the oldest patterns: the opportunity feels real, often with a polished term sheet, then a small "necessary" cost appears, then another, and the investment never closes. Idea and work harvesting is quieter: someone poses as a partner, collects your plans or weeks of unpaid work, then goes silent or launches something similar.
Do real investors ever charge founders a fee?
No. It is a widely held norm in early-stage investing that real investors do not charge founders to review a pitch, perform due diligence or close an investment. Investors pay for their own analysis because evaluating deals is their job.
One nuance: in some priced rounds, the company agrees to cover a capped amount of the lead investor's legal costs. That is written into the negotiated terms, paid at closing out of the money raised and handled by lawyers. It is never a payment you send up front so that an investor will consider you.
Paying for a service you chose, such as your own lawyer, an accountant or a clearly priced feedback service, is also different, as long as it is not presented as a step toward the seller investing in you. The test is simple: is this person asking me to pay so that they will give me money? If yes, walk away.
How do you verify that an investor is real?
Verify an investor by confirming their identity through a channel you find yourself, then checking their specific claims with evidence and with founders they did not hand-pick. Work through these steps before you share anything sensitive.
- Find the contact route yourself. Type the firm's website address yourself and check that the person and their email address appear there. Do not rely on links, numbers or invitations they sent.
- Check the email domain carefully. Lookalike domains use an extra letter, a swapped character or a different ending. Compare it character by character.
- Ask plain process questions. What is your typical check size? Which instrument do you use? Who else decides, and how long does it take? Real investors answer easily; vague or shifting answers are a signal.
- Talk to founders they have backed. Ask for two or three, then find one more yourself. Ask how the investor behaved when things got hard.
- Get on a live video call. Keep cameras on and confirm the person matches their official photos. Repeated refusal to appear on video is a warning sign.
- Check what has actually been verified. On RUV Labs, an Investor badge means a person reviewed documents showing investor status on the review date; see what each badge covers.
- Slow down when pushed. Real deals survive a few days of checking. Pressure to sign or pay "today" is designed to stop you from doing these steps.
How do you verify that a potential co-founder is real?
Verify a potential co-founder by confirming their identity, checking their work history with evidence and references, and working together on something small before you share sensitive assets.
- Confirm identity first. Prefer people verified through a trusted process, and check that the name on their profile matches what they tell you.
- Check background claims. Look for document-verified Employment or Education credentials, ask for references, and find at least one former colleague yourself.
- See real work. Walk through a portfolio, past projects or code together, and ask what they personally did versus the team.
- Work together before committing. A short, scoped project with a clear end date shows how someone communicates and handles disagreement.
- Put terms in writing early. Before anyone contributes meaningful work or intellectual property, agree on who owns what in a written co-founder agreement.
A raw idea is rarely the valuable part of a startup; the code, data, customers and relationships you build are. Share the story freely, but gate the assets.
What are the red flags of a startup scam?
The clearest red flags are requests for money, pressure to act fast, secrecy, and contact details that do not match official sources. Treat any one of these as a reason to pause and verify, and two or more as a reason to stop.
- They ask for any upfront fee, deposit, "refundable" payment, gift card or cryptocurrency.
- They insist on a lawyer, escrow agent or valuation firm you cannot find independently.
- The email domain, phone number or profile does not match the official one.
- They avoid live video calls or always have a reason the camera is off.
- They push urgency: "the offer expires tonight."
- They want to move to a private messaging app immediately.
- Their story changes, or they cannot name past investments or employers you can confirm.
- They ask for source code, customer lists or bank access early.
- The offer is unusually generous, with a high valuation and almost no questions.
- They ask you to keep the conversation from your co-founders, advisors or lawyer.
What should you never send before trust is established?
Never send money, passwords, one-time login codes or photos of your ID to an individual you met online, no matter how legitimate the opportunity looks. Beyond that, share information in stages that match how far the relationship has progressed.
Never send, at any stage:
- Upfront fees or deposits to anyone promising investment
- Passwords, one-time codes or recovery codes for any account
- Photos of your passport or other ID over chat or email
- Online banking logins or card details
- Signatures on documents you have not read and had reviewed
Share in stages:
- First contact: a short description, your public profile and a brief deck summary.
- After you have verified the person: the full deck, key metrics and a product demo.
- After serious mutual interest, such as a term sheet: the cap table, contracts and detailed financials, ideally in a data room where you can revoke access.
Legitimate deals do include identity checks, but through official channels such as a verification provider, a bank or the lawyers handling the closing, not a photo sent to someone's personal account.
What should you do if you think you are being targeted?
If you think you are being targeted, stop engaging, send nothing more, save the evidence, and report it to the platform and, if money or identity documents are involved, to your bank and the relevant authorities. Acting quickly limits the damage.
- Stop and do not pay. You do not owe an explanation; a short "I am not proceeding" is enough.
- Save everything. Keep messages, email headers, profile links and payment details, and take screenshots before accounts disappear.
- Report and block on the platform where you met the person, so others are protected.
- Call your bank immediately if you paid. A transfer can sometimes be stopped or reversed, but only if you move fast.
- Secure your accounts. Change any password or code you shared, turn on two-factor authentication, and revoke shared access to drives, code or tools.
- Watch for identity misuse. If you sent ID documents, monitor your accounts and follow your government's guidance on identity theft.
- Report to authorities and warn the real person. File a report with the police or your national fraud reporting agency, and tell any impersonated investor or firm through their official contact page.
This is general information, not legal, tax or investment advice; talk to a qualified professional about your situation.
How RUV Labs helps
- Posting, messaging and listing a startup require identity verification. It is free and done by our partner Didit with a government ID, a liveness check and a face match, and RUV Labs does not store ID images or face data.
- Members can add free, document-verified badges (Business, Employment, Education, Investor, Revenue shown as a band, and Funded), each reviewed by a person and valid for one year. A badge means the documents showed the stated fact on the review date; it is not an endorsement or investment advice.
- Contact starts with a message request that you can accept, decline or block. Phone numbers, emails and messenger handles are blocked in first requests, so you decide when to share contact details.
- In the Deal Room, RUV Labs does not handle funds and charges no success fees. Read the community guidelines for what is not allowed, and see how to build a profile people trust.