Post Written by Vasily Alekseenko

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If you’re raising money right now, congrats — you’re officially a giant blinking target.

No agency tracks exactly how many startup founders get scammed each year. But we do know that in 2024 alone, people lost $5.7 billion to investment scams, up a billion from the year before. Meanwhile in the UK, total fraud losses hit £1.17 billion, with a chunky piece of that tied to investment trickery.

There’s no neat pie chart showing how much of this was lost by pre-seed or Series A founders. But you’d have to be pretty naive to think that people racing against their runway, often raising for the first time, aren’t a juicy mark.

So here’s your roadmap — the most common fundraising scams (plus shady adjacent nonsense) targeting startups in the UK, EU, and beyond. And exactly what to look for so you don’t end up next on the cautionary tale list.

1. The advance fee fairy tale

The most basic con out there.

A slick “family office” or private investor pops up saying:

“We’re ready to commit £1 million. Just wire us £5,000 for compliance or legal checks.”

Reality: no credible investor asks for an upfront payment to invest.

Any fees come out of the investment proceeds after they wire you the money, not from your precious cash reserves.

This scam is so common it’s first on nearly every investor fraud list out there. If someone invoices you before investing, that’s your cue to ghost them — fast.

2. Pay-to-pitch events (aka “buy hope”)

You’ll see emails like:

“Join our exclusive investor showcase for just £3k. Last slots left!”

Some events are legit (they pay for venue costs, connect you to real angels, offer side meetings). Many, though, exist purely to cash in on founders’ desperation. You pay, pitch, maybe sip warm prosecco, and go home with… nothing.

Rule of thumb: If the only way to get in front of their investors is by paying upfront, question it hard.

3. Fake VCs just mining your data

A personal favourite among low-effort grifts.

Some “analyst” on LinkedIn reaches out, loves your deck, and then wants:

“your cap table, pipeline, full revenue projections, and customer list.”

Then they vanish. Sometimes they’re building a report to sell. Sometimes prepping to clone your business. Or maybe just wasting your time.

Lesson: send a teaser deck first, keep the full data room for later.

4. Strategic “advisors” who want 30%

They’ll flatter you with:

“I love what you’re building. Let me open doors. I’ll just take 30% equity now.”

🚩 Big difference between real startup advisors (1-5%, vested, milestone-based) and leeches who want control before proving they’re worth it.

5. The bait-and-switch fund broker

This one stings because it starts off sounding like your dream investor.

“We’re interested, let’s have a few calls.”

Then it pivots to

“Actually, we help founders raise from other investors — for a monthly retainer.”

Congrats, you thought you were pitching for money, turns out you’re being pitched to pay them.

Perfectly legal, but misleading and a giant time sink.

6. Shady convertible notes that screw you later

Not technically a scam — but shady as hell.

Some “investors” send you notes with brutal terms:

80% discount capsforced exits in 12 monthspersonal guarantees if things fail

Suddenly your early-stage round looks like a payday loan.

Rule: Have a proper startup lawyer review your docs.

7. Fake LP pressure

A fund says:

“We want to invest, we just need to show your deal to our LPs to close them.”

If their own fund isn’t actually closed, they legally can’t commit money. You’re just being used as bait to help them raise — while you risk losing precious time with no guarantee they’ll ever follow through.

8. Big PR + investor intros… for a chunky upfront fee

“We’ll get you in Forbes and line up top US angels. £8k upfront to start.”

Sure you will.

Real PR or fundraise advisors usually tie compensation to actual deliverables or split fees with success bonuses. If someone demands 100% upfront — and then goes quiet after your money clears — that’s on you.

9. Dodgy accelerators

Some accelerators take huge equity or big fees for generic workshops, then wave you off with a PDF “certificate.” Worst case, they close shop right after you pay.

Do the checks: who’s behind it? Can you speak to actual alumni? Is there proof of companies raising or scaling after?

10. The long-con ghost investor (aka my own story)

This one’s personal (you can read more here).

A guy once pretended to be my investor for months. Endless calls, progress updates, promises of “next week we wire.” Even suggested I stop talking to other investors and prioritise him. Then… nothing. Just a giant time sink.

Lesson:

If someone’s always “almost there” but never sends a term sheet, keep them on the side burner.

Until money’s in the bank, it’s fiction.

🛡️ How to keep your startup off the scam casualty list

✅ Run due diligence on THEM.

Check Crunchbase, AngelList, LinkedIn. Call founders they’ve backed. A serious investor expects it.

✅ Never pay to raise.

Investors pay you. Any fees come out of the funds they wire, not your bank account upfront.

✅ Stage your data.

A teaser deck first. Keep the full data room for when the relationship’s real.

✅ Use a real startup lawyer.

Not your cousin who did your house contract.

✅ Keep your pipeline open.

Never pause your fundraising for one “almost there” promise.

✅ Ask the founder community.

You’re not alone — there’s a huge network of founders who’ve been burned before and are happy to share. Before you sign or pay for anything, ask around. If you want to shortcut it, we’ve got a private online community through our membership where founders do exactly that — swap names, check references, and keep each other off scammer hit lists.