In search of investment. How not to fly into the web of divorce

He rang me yesterday a long-time client, who is in search of financing for your investment project. Sufficiently serious project, costing about $ 20 million, according to which we are not so long ago held pre-investment studies and developed a business plan.

And he called on that matter. Appealed to him the other day from a company and presenting vague, proposed financing.

All that was understood by the client of the call, is that the company is acting on behalf of a syndicate of international banking and finance projects in various sectors focus on Ukrainian territory. Also, they say, is a British financial company, which includes five U.S. banks and 2 insurance companies, the turnover on transactions of over $ 100 billion.

They agreed to arrange a personal meeting. Well, since I am speaking as a project expert and accompanied him at all stages, and my presence at the talks with investors required.

Something, however, alarmed. First of all, of such a company had not previously heard, and contact information as there was only a mobile phone number. And indeed, in fact, normal people that meeting precedes a specific business correspondence, the study provided information, which is primary due diligence, industry expertise.

Well. Google, as they say, to help. It took 10 seconds for what would be found that the telephone number from which you called, appears in several job openings. Next - easier. Seeing in the same E-mail and landline phones, it remains only to find the company name, corporate websites and other information on the topic.

That was found right away?

First of all, a lot of negative feedback of former employees of the sharagi and a huge amount of discussion on the topic at a financial forum.

Another 10 minutes spent on something that would find out on WHOIS, the site (by the way, "slyapanny on the knee"), allegedly a British company registered in the Ukrainian hosting and domain name belongs to the individual.
On the "Customers and partners' impressive list of banks. Each in turn enter into a search engine - such banks do not exist in nature.
Physical office in London, they do not. It really address the British company, but providing paid services to the mailbox and subscriber service virtual office.
And for fun, knowing the names of Ukrainian companies from the register of RPI pulled their registration data, and received the founders name, found that for all these are just two young men of 1985 year of birth.

The scheme of divorce is as simple as boots and used everywhere:

-Contract for Services
-Completing the investment application and payment of USD 300 for its consideration and allegedly forwarded to London;
- The act of executed works
-Getting the "yes" (and they themselves are responsible)
Order and deposit-Cambio (bills, in our)
-Payment for Cambio - USD 1500
- The act of executed works
-Choice of the paying agent and the opening of accounts - USD 500
- The act of executed works
-Audit - USD 5,000 (not PWC and KPMG, and an unknown PE Smith)
- The act of executed works
Assessment, business plan, legal opinion, the harmonization of conditions and debt issuance, insurance, certification risk, execution of contracts, the signing of additional conditions and so on.
Between each of the items - the signing of the Act of transfer and acceptance of work performed under the contract.

When you spend 50 - 70 000 evergreen money, but it seems like a fit to the final stage and the first transaction, they will throw up your hands, you offer yourself to call the London office and will possibly hide from you. Remind you - when you call London numbers will speak to you from Kiev. With the Slavic accent, which you will receive a Welsh dialect.

It should be remembered properly drafted a contract for services, and signed by acts of reception and transmission of the contract - the legal protection.

The defense they have enough competent.Treaty drafted in such a way that you are not able to go to the next step without paying for the preceding and not signing the act that everyone is happy. Complain and have no one to sue. Everything is done in good faith and in his right mind.

I do not know that these figures for the procedure cambium, but a bill in favor of third parties wary. Like the fact that their design is carried out in the early stages before the outbreak of the debt.
In general, the international exchange law, there are many synonyms and possible conflicts.
Very put it mildly, I do not recommend signing such documents prior to actual funding.

For everything in this world have to pay. And for the learning experience, too. Even such a thing. I will try to save a little money to you.

Do not allow yourself to throw.

In order to determine with whom you are dealing with 90% of cases you do not need a private investigator.
You can not help themselves less effectively.

What you should know, first of all.

We must know that the majority of investment brokers do not earn interest on the result. They earn on the process.
That is. If payment by results would have to pay the investor (which he will not do by definition), then the applicant pays the fees of the process (less experience, more naive)

The most important definition. If you ask for money to start funding - this is a clear divorce.

By the way, not to be confused with the actual volume of work, such as pre-competitive research and business planning. For example, BFM Group. Never, under any circumstances do not promise anyone anything. What do we do? Evaluation of estimates, bribes, costs, fixed costs. Construction. Engineering. Marketing planning. Then draw up a business plan. Then - the accompaniment. And - are responsible head. And it's not advertising.
We could earn twenty times, doing so, what do all these swindlers.
We do not. And I, as owner, sincerely believe that a good name is worth more than any money in the world. The point.

So, about the money.

At that still should pay attention before you pay the first installment looks steep representative investor?

- The availability of intelligence on the Internet. As they say today: "If you do not have the internet - you do not exist." Should interest all. To do this the same Google enter the name, phone numbers, e-mails, names of executives. Use the advanced search and enter data by enclosing them in parenthesis. Analyze any information found. If in the process find it any more contact details - and look for them. The same is repeated in Yandex. These search engines are different search algorithms. Therefore, some resources, banned by Google, there may be a Yandex. And vice versa.

- Offer Unsecured funding for 5-10% per annum   currency, but the talk about conversion into national currency at the rate of the Central Bank / National Bank. In mathematics scammers may be at odds, but the margin between the existing deposit and lending rates, they can not guess. Limitations on unsecured loans authorized by the bank as often drop out of the scope of competence of intermediaries.

- Hard-funded and be interested implemented projects.   Ask for contact details for the leaders of these projects. Check these contacts on the Internet.
In attempts to hide information - turn around and leave.

- Pay close attention to the style of correspondence and communication style of your opponents.   Excessive abundance of English-speaking "corporatism" suggests that before you are not investors, and punty young amateurs. Ignoring the basics of office management and ethics correspondence suggests the same.

- Communicate and assign only meeting with the leaders. It's no good to you, Project Director, to discuss the nuances of investing in the construction of a plant with a 20-year old girl who has no knowledge of elementary banking and legal terminology.

- Feel the interlocutors.If you do not know how to read between the lines, calculate the voltage and vazomotoriku, catch nedogovorki or hesitation, pauses at awkward questions - go to live another 10 years, and then come back.

- Pay attention to what documents you need to. There are common rules and the same financial laws. Lender / investor always need full information about the borrower and its business. Required description of the project, a qualitative market research, business financial plan. Together this is called a business plan.
If something out of this attention does not pay - you throw.

- Discussing the project, watch for a reaction to the interest and the details of the project. No one person will never forget the legal component, or tax payments.
If you are subject to all aspects of your business - you have the opportunity to sort of test, allegedly forgetting about something global. If you can not be corrected - press his hand and say good-bye. Most of these people you are not on the road.

To be continued.

Andrei Stadnik
BFM Group Ukraine


Investment - a project company BFM Group Ukraine is known for his participation in the market in a number of significant projects of high-tech industries of food, construction, chemical and other industries.
The company also provides outsourcing services for pre-competitive research and development investment documentation (business planning, feasibility studies, investment memoranda, development of financial models).

14 October 2011
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