Women Entrepreneurs, How To Check If Your Potential Investor Is Not A Fraud! #BizTip

Last updated 26 Jul 2017 . 7 min read

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Listen up our budding SHEROES entrepreneurs, it is better to be safe than sorry!

Gauri Bedekar, co-founder and Creative Head of Lawyered helps people overcome their legal troubles by making legal solutions – better, easier and faster. However Gauri shared with us why it is important to do a thorough check of an inestor before you decide to get them onboard. 

If you are planning to get an (unknown) investor, you must read this. This is how she and her team managed to spot this person posing as an investor.

"On the evening of 3rd April, Shashank, my partner, rushed to my table and handed me his cell phone, ‘It’s for you, it’s an investor’, he whispered. Intrigued and excited about having an  investor on-call, in my head I was already ready with the numbers and metrics I could have shared with him.

The call was good, it went like how every other founder-investor conversation usually is. We spoke for around 30 minutes where I told him about Lawyered and he told me about himself.

His name was "Manish Maheshwari" and claimed to be the head of an 10 year old investment firm named 'Lever Value Funds & Advisors’ situated in ‘Kolkata', interestingly, he did not wish to speak to my partners who usually handle fund raising at Lawyered.

He mentioned that he’s only interested in supporting female founders. The call concluded with him asking for our pitch deck, so that he could have a much more detailed conversation the next day.

For a startup, the feeling of seeing an investor get interested in your product is quite indescribable. I spent the whole night polishing our pitch deck and making sure we had the answers to all possible questions.

The next call

Preparing for our next conversation, I thought it’d be a good idea to read more about the investor and the company. This was when things started getting a little murky.

I was quite surprised that I couldn’t find any credible information on ‘Lever Value Funds & Advisors’ and even when I searched him by his name, all that was returned was an empty Linkedin profile.

Still, being optimistic about the idea of raising funds, I removed my skepticism and thought I’d just clear my doubts about him in the next call.

It was time for the next call. Although I had prepared a list of questions for him, the call went on for an hour just talking about Lawyered, the team, traction, revenue etc.

At this point of time, I finally told him the concern. I told him that his digital absence is a worry and the team would like to know more about him. He concluded the call saying he would send us a mail with his details and asked us to send our next 5 year business projections.

When things went from bad to worse

We got the mail the next day, and things went from bad to worse. The mail, seemed like what a scammer would send to build trust.

It had absolutely zero credibility, had zero mentions or links to any form of digital presence.

Not being able to wait, I called him up and asked him to clarify his position, role and history. I handed the call to my partner, Shashank, knowing he would be a better person to take the conversation forward.

For straight 10 minutes, Manish, dodged or refused to answer any basic questions asked by Shashank. He was not able to provide the registered company name or his Director Identification Number (DIN).

He went on to say that he is an investor and doesn’t bother to answer these questions. He did not respond to truthfully till we actually mentioned our position and how easy it is for us to take multiple legal actions against this.

Well, within a few minutes of threatening him with legal action, this is how his story changed.

The actual story

His 10 year old firm became a new company yet to be registered. His portfolio of funded companies vanished and he mentioned that ‘Lawyered’ was going to be the first investment for them. When we asked about his partners, he suddenly became a ‘one-man show’ with no team or R&D department.

He disconnected the call. Leaving us not just furious, but confused

So this is what we did

Since he asked us for ‘valuable’ information, guessing he might be a competitor, it was imperative that we warned our other competitors.

I also reached out to fellow female founders on a Whatsapp group that I’m a part of, and this is where things became crazier. Out of the 25 female founders in the group, 7 of them had been approached by this impersonator over the last few months.

When I asked for details, all of the founders mentioned that they could guess that credibility was at question and the person sounded more of a spammer.

Following this, we also posted on social media to warn more people. On Linkedin we were reached out by 2 more individuals who were contacted with this person.

Luckily all the people we came across were smart enough to not fall prey to this act, but at the same time I could not stop thinking about how many more feale entrepreneurs might have been contacted by this person.

Stay alert

Impersonating an investor can be a very easy way to lure startups in having conversations, and startups are vulnerable enough to disclose information in hopes of landing big money. Impersonating someone can land the impersonator in serious trouble, the power of legal can be used to protect yourself from such people.

Section 406, 419 and 406 in the Indian Penal Code can both be implemented to such activities. IPC 406 refers to criminal breach of trust, while 419 and 420 are referred to impersonation and fraud respectively.

Taking a legal action for such things is not always a costly affair as often misjudged. If you are duped by such people, going after them on your own could be dangerous. Consulting a lawyer whenever you come across such situations is the smartest move you can make."

Lawyered is making it easier for people to find and hire verified lawyers. The idea is to bring legal online, make it cost effective, and accessible for all. 

If you have any other tips to share or call out such fraudulent characters, we will help you spread the word. 

Write in to us at lola@sheroes.in and get a chance to be featured on our platform.

Lola Jutta
An unapologetic writer, budding travel enthusiast and a default optimist! Life is what you make out of it.

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