Startups and scammers. A personal experience story

 

How we searched for investments

I want to share a story with you. I’ll start off by saying that we are in the process of raising investment, which means that we’ve left the description of our project at all the websites and databases that have at least some connection with VC.

At the same time, we’re in talks with the investors that we already know, but experience shows that such talks can continue indefinitely and without tangible progress. And we can’t wait forever.

It was the end of December, and all of my business correspondence had already died down, as the majority of my correspondents were either on vacation or occupied with Christmas preparations. But on the morning of December 22 I received a letter from the man, whom I met at the Techcrunch Disrupt event in London.

He wrote that he had an interested investor and that he’d be happy to introduce us for a fee, based on the sum of the future deal. Obviously, I was interested and agreed to his condition. Introductions followed.

I was delighted. The potential investor was a large Asian corporation with a portfolio of industrial, financial, and telecom enterprises. The investor’s name was Aditya Вirla Nuvo.

I should note here that all of our correspondence was done by email. All of the letters that I received came from the adityabirlanuvolimited.com domain address, and were signed:

Yours Faithfully

Dr. C. S. Seshadri

Managing Director

Aditya Birla Nuvo and Sector Head — Chemicals (Thailand)

There was also a phone number and an address in Bangkok.

Things are heating up

Preliminary correspondence and completing all the questionnaires and registry cards sent to me by my correspondent took about five days. I sent the completed forms in the evening of December 26. Just two days later I received an answer, stating that the project has passed their due diligence, and they are ready to close the investment round under the terms, which sounded like a fairytale to us. They also asked us not to delay the decision, as they wanted to close the deal by the end of January, before the end of their financial year.

I have to give a credit to our consulting lawyer Leonard Graver. He pointed out that the English language of my correspondent was far from the level required for a top manager of a large international corporation. I added Leonard to our email exchanges in the process of completing the questionnaires and registry cards.

What also proved to be quite important was the fact that one of our board members Dmitry Maslennikov was on vacation in Thailand, when this whole affair began.

At that moment, everyone, save for myself, was sceptical. But despite the doubts that were shown by my colleagues I continued to believe in Christmas miracles, especially since I couldn’t quite fathom what the scam could be.

But I did have my doubts and was surrounded by sceptical colleagues and partners, so I decided to get some insurance and run some sort of background check.

First doubts

I began by checking out the adityabirlanuvolimited.com website and domain. After running it through the whois service I discovered that adityabirlanuvo.com and adityabirlanuvolimited.com domains have different owners and DNS settings.

After seeing this discrepancy, I first wrote it off as regional specifics but decided that it would be a good idea for Dmitry to go to Bangkok and personally meet the potential investors before signing anything. I guess I won’t surprise anyone by saying that all of the attempts to set up a meeting proved unsuccessful.

On December 28, they sent us an official letter of intent to invest in our project along with a bunch of their registration documents. After receiving the scans of their registration documents, I began to think of the ways to examine their validity. The main problem was that all of the documents were in Thai only.

I decided that the best method would be to inquire the embassy of Thailand, asking them to check the registration documents, but since it was almost the New Year’s, we couldn’t expect a quick answer.

When you really want to believe

In addition to the documents and the letter of intent, our correspondents had sent us a written instruction on requesting a special document from the Thailand Chamber of Commerce, as this document would give the investor the right to send us money. In the letter was also a recommendation and contacts of the local law firm that could help us do this.

Naturally, I googled some other law firms in Thailand and sent out a letter requesting help in this matter both to the recommended law firm and to some others. The recommended law firm replied within a few hours (keep in mind that it was December 29), while the rest of the law firms sent me polite automated replies informing me of New Year’s holidays.

Since at that point I had no direct proof of scamming, I decided to cheer my team up by sending the letter that talked about the likelihood of raising a round of investments.

Meanwhile…

The Thai lawyers from the recommended firm who replied to my request flooded me with a whole bunch of new forms, which I excitedly completed over the New Year’s. And what for? So that on the morning of January 2, they sent us an invoice for $5,700 required as payment for the necessary document. That would’ve be ok, but I decided to wait for the answers from the other law firms.

On the morning of January 4, I received the first answer, which stated that the lawyers had tried several times to get in touch with my correspondent by phone, but that they were simply told to get lost.

On the same day, I received two more letters that told me that this is a scam.

The final nail into my dream’s coffin was driven by the embassy, which replied to my inquiry by stating that the registration documents that I sent them have nothing to do with Aditya Birla Nuvo.

What vexes me the most is the time that I lost and that could’ve been spent doing really useful stuff. As for the scam itself, this seems like a variation of the so-called “Nigerian 419 letters” and just doing by these people’s organised nature, I’m sure we weren’t the only ones to receive such offer of investments.

I want to close this off by saying that it’s good to trust people, but it’s better to be vigilant!

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