Startup Scamopedia: How to spot a rogue “investor”!

Raising early-stage capital as a UK startup founder is hard enough without dodging the parade of chancers, rogues, and “investors” who pop up the moment you announce your pre-seed round on LinkedIn.

Before we dive in, a quick note on what this article isn’t about. We’re not covering the perfectly-legal-but-deeply-annoying corners of the industry:

• Platforms that charge you upfront fees for investor “matching”, and somehow have a success rate lower than a coin flip.

• Angel groups that demand £2k+ just to pitch, with zero certainty anyone there actually invests.

• SEIS funds with termsheets more toxic than a Love Island reunion episode.

These are definitely “buyer beware”, but they’re not outright scams.

This guide focuses on the truly rogue operators - the ones who hide behind fresh identities, recycled company names, and slick email signatures. And no, we don’t name names. Not because it isn’t tempting, but because they change them weekly… and we prefer not to get sued for defamation by people who don’t even exist.

Why startup scams are thriving

Early-stage founders - especially first-timers - are prime targets. You’re under pressure to close your round, you’re probably operating in a funding market that feels like wading through concrete, and a cold email promising a quick close on favourable terms can feel like manna from heaven - until the rug is pulled.

That combination is irresistible. And scammers know it.

The good news? Many scams share common psychological levers: urgency, exclusivity, and the promise of easy money. Savvy founders learn to spot those levers early.

The Scamopedia: Common scam patterns to watch for...

Below are the most frequent scam archetypes currently circulating among UK founders.

“We’ll invest - but only through our paperwork”

This is one of the most widespread approaches. Everything looks normal at first: polite emails, a review of your deck, a quick Zoom call. Then, suddenly, the investor insists the deal must use their documentation - often hundreds of pages of pseudo-legal templates referencing foreign courts, exotic regulatory processes, or “administrative investment authorities”.

The goal is simple: overwhelm you with complexity long enough to justify an upfront payment for “processing”, “legalisation”, or “certification”.

Real investors don’t care whose templates are used - and they certainly don’t invent courts you’ve never heard of.

“A loan for your startup, guaranteed personally by… you”

Some scammers avoid the equity conversation entirely and pitch what looks like a founder-friendly loan. The trap appears later, when you're asked to sign a personal guarantee, pay a release fee, or transfer a “setup amount” to activate the loan.

Startup loans without collateral and with favourable terms don’t magically appear from strangers. If you’re ever told a loan requires your upfront payment - run!

“We just need a fee - but please send it in cryptocurrency”

Scammers love crypto because it’s instant, anonymous, and irreversible. Increasingly, founders report receiving investment offers where commissions, compliance fees, or escrow deposits must be paid in Bitcoin or USDT.

Legitimate investors do not require crypto payments. Full stop.

“To unlock the investment, you’ll need to pay for a process first”

This comes in many flavours - AML clearance, foreign ministry notarisation, escrow activation, bond procurement, embassy-level certification.

The wording varies, but the structure never does... you pay first, investment never arrives.

If an investor claims a government, insurer, exchange, or regulator needs you to pay a fee before funds can move, it’s almost certainly a scam.

“We’ll invest more than you’re asking for… but…”

A classic psychological hook. You tell them you’re raising £200k. They come back with a triumphant “We’ll do £400k!”. Suddenly, you’re flattered - and therefore less guarded.

But the oversized commitment comes with a catch: a fee, a bond, or some exotic requirement you’ve never heard of.

Excessively generous offers are a tool - not a compliment.

The “Investment Security Bond” and other jargon-heavy insurance traps

One of the newer pseudo-technical scams involves elaborate “insurance-backed investment guarantees”. These schemes come wrapped in long, formal paragraphs full of legal and insurance terminology: D&O liability, surety relationships, indemnifications, force majeure, bankruptcy protections, and multi-party bond structures.

The scammer insists that you, the startup, must purchase an “Investment Security Bond” or equivalent product before the investment can be released. They may even link to legitimate definitions to appear credible.

Legitimate investors do not ask founders to purchase insurance to receive investment. These are dressed-up advance-fee scams for the modern era.

“Fly out to meet us - your investment is waiting”

Some fraudsters try to legitimise themselves through physical presence. They’ll invite you abroad, often to Dubai, Singapore, Bangkok, or Cyprus, insisting the deal can only be finalised in person.

Once you arrive, unexpected “bank release fees” appear - or the investor simply never shows. If someone won’t advance to proper due diligence before demanding international travel, it’s not a real investor.

Anything involving TPS Trademark

For years, TPS Trademark (and similar entities) have sent founders official-looking notices demanding payment for trademark registration, renewal, or “international protection”. The World Intellectual Property Organization (WIPO) themselves have issued warnings about them.

If you didn’t request a trademark service, invoice, or renewal - and something arrives demanding payment - ignore it.

Fake VCs and cloned investment firms

One of the biggest new trends is cloning: scammers impersonate real firms by copying logos, team pages, and domain names - sometimes even using the real partners’ names. They’ll contact founders with legitimate-sounding investment interest but use spoofed emails or lookalike domains (e.g., “.co” instead of “.com”).

The Financial Conduct Authority has flagged this as a rapidly growing problem. Always cross-check a firm on the FCA register and verify emails through official websites.

Fake crypto platforms that show fake investment returns

A major global trend spilling into the startup world is the rise of synthetic crypto investment platforms - fake dashboards that display fabricated growth, rising balances, and “pending payouts”. Eventually, withdrawals fail unless you pay a “release fee”, “tax”, or “gas top-up”.

Founders report being targeted after posting on LinkedIn or joining founder communities, approached by people positioning themselves as “strategic crypto investors” or “liquidity providers”.

The “advisor-owner” scam

This emerging scam involves someone posing as a strategic advisor, offering to help with fundraising or market expansion. Early conversations seem helpful and harmless. Then comes the twist: they ask for a small monthly retainer and a success fee before making introductions.

Often, the intros never materialise - or lead to more scammy “investors”. This one blurs the line between predatory and fraudulent, but it’s increasingly common in the UK founder ecosystem.

How to protect yourself

Know who you’re talking to

Always verify identity through multiple channels:

• Call back on publicly listed numbers

• Cross-check LinkedIn and Crunchbase profiles

• Email through verified domain addresses

If they’re a legitimate investor, they won’t mind scrutiny.

Verify regulatory status

In the UK, if someone claims to be offering regulated investment services, confirm with the FCA’s register. The FCA has introduced tools precisely to help consumers check whether a firm is genuine.

Never pay for investment

If you’re asked to pay for:

• fees,

• insurance,

• bond costs,

• legalisation,

• administrative charges,

before any money arrives - treat it as a scam until proven otherwise.

Keep crypto transactions at arm’s length

Cryptocurrency offers anonymity that scammers love. Never send funds or sign contracts that hinge on crypto payments, especially to individuals you’ve never met or vetted.

Get legal & financial advice

Even if it looks like a good deal, have an expert review the terms before you agree.

Trust your instincts

Most scams collapse when you ask tough questions, refuse to pay upfront, and insist on clear, verifiable documentation.

Conclusion

The world of startup fundraising is full of opportunity - but it’s also full of chancers trying to take advantage of stressed founders. Whether it’s the classic advance-fee con dressed in legalese, a cloned investor website, or a slick crypto “investment platform” showing fake returns, rogue actors are constantly inventing new ways to deceive.

Your best defence is awareness: understand the patterns, verify everything, and never compromise your own judgement for the sake of speed.