Fake Investor Scams
Bogus 'investors' who target startups with due-diligence fees, advance costs, or data theft.
Last reviewed: 1 June 2026
What this scam is
Fake investor scams target founders and startups with promises of funding that require upfront fees, paid 'due diligence', or sensitive data — extracting money and information without ever investing.
How it works
A supposed investor or fund expresses strong interest, then introduces costs: legal fees, due-diligence retainers, 'compliance' payments, or demands for sensitive financials and IP. The investment never materialises.
Common red flags
- Investor requiring upfront fees to proceed
- Vague fund with no verifiable track record
- Pressure to share sensitive data or IP early
- Reluctance to use standard, transparent processes
Sanitized example messages
Illustrative, sanitized examples. Personal details are replaced with placeholders such as [phone number] and [fake link].
Our fund will invest [amount], but first you must cover a [amount] due-diligence retainer.
Payment methods used
- Upfront fees
- Retainers
- Data harvested
Who is usually targeted
- Startup founders
- Small businesses seeking capital
What to do immediately
- Never pay upfront fees to receive investment
- Verify the fund and individuals independently
- Protect sensitive data; report the scam
Evidence to preserve
- Emails and term sheets
- Fee demands
- Investor details
Where to report it
- Action Fraud (UK) — UK national fraud & cybercrime reporting centre
- FTC ReportFraud (US) — US Federal Trade Commission fraud reports
- FBI IC3 (US) — US Internet Crime Complaint Center
- Scamwatch (Australia) — Australian competition & consumer reporting
- Your bank's fraud line — Use the number on the back of your card or in your banking app — never a number the caller gives you
Always verify reporting routes and emergency contacts on the official government or agency website for your country.
Frequently asked questions
Do real investors charge founders upfront fees?
Legitimate investors don't require founders to pay upfront 'due diligence' or 'compliance' fees to receive funding. Such demands, and pressure to share sensitive data early, are scam signals.