Being an entrepreneur is comparable to walking on the path of unexpected happenings. Entrepreneurs are needed to prepare themselves for every possible situation, including scams and frauds. Raghib Khan shares his knowledge of entrepreneurship and the scams that revolve around it.
In India, the startup space has gained a massive boom. More and more young entrepreneurs are focusing on starting a business on their own to change the world. Unfortunately, these aspiring entrepreneurs are young, vulnerable, and immature. The world is full of scammers and fraudsters who are out to reap the advantage on new startups being in dire need of funding but don’t know how to get it.
Such deception is common, not only in India but around the world. One major factor responsible for it is the norm of entrepreneurship that encourages founders to be hustlers for their companies, no matter the situation. Though founders should have a vital skill to persuade their audience towards always looking up for opportunities with enthusiasm, exaggeration to falsity will always result in a slippery slope. This falsity later translates itself to fraud.
How Scammers use this Vulnerability
Scammers enter the entrepreneur’s field and focus on making all kinds of promises to lure them in. For instance, they may offer them a promise of funding through an offer of an influential connection and end up converting poor entrepreneurs’ dreams into a living nightmare. These scammers end up stealing private data along with their idea and even ownership of all the hard work done. This tends to take a toll on the physical and mental health of the individual.
The HOW Of Spotting Fraudsters So You Won’t Get Deceived
* They Are Flashy
Though a big chunk of this sign is understood on a word-to-word talk, real entrepreneurs aren’t flashy in any way. Real people in the startup market are always busy building the best product available in addition to hiring and retaining their all-star team, meeting with investors, and talking with influential people. Therefore, people in the startup business are busy in building their market. Hence, real ones do not have time to flash or boast about their success.
* Glorified Solopreneur
Individuals involved in entrepreneurship should understand that not every self-employed individual is an entrepreneur, and some are freelancers who provide services to other people, including other entrepreneurs. Therefore, in a way, entrepreneurs aren’t directly involved with their business, but freelancers such as writers, coders, bookkeepers are. Hence, if an individual boasts of themselves as a solopreneur without any team, there are high chances of them being a fraudster.
No matter what situation, the real entrepreneurs are consistent. They aim at showing to work every day with the same effort and work on to better the great product into the best with their consistency. Fake entrepreneurs are inconsistent and won’t show up to work because of multiple excuses posed as concrete reasons. Therefore, real ones will be consistent, reliable, and focused on their goals regardless of the situation.
* Scammers Think Journey Is Luxurious
Though the journey of entrepreneurship is luxurious in terms of experience, it is not always great. It is full of setbacks, disappointments, and bad times. The fake entrepreneur only focuses on the good times. Real entrepreneurs take good and bad times as similar lessons and learn from them both. Real ones realize how battling failure only helps in making you know how to overcome everything.
Types Of Fraud Happening In The Startup Community
* Identity Theft
Identity theft is a kind of theft that can cost you a significant amount of money. Scammers can steal your identity and use it to access your bank records and passwords. As an entrepreneur, make sure you keep your business account statements and sensitive information secured. With digitization, digital copies of everything are often considered. Make sure you use complex usernames and passwords.
* Money Fraud
The startup market circulates cash 24*7. Hence, money fraud can happen quickly without you or the customer noticing. But, counterfeit money is worthless when you go to deposit the funds to the bank. Therefore, it’s essential for entrepreneurs to protect their emerging businesses from money fraud by learning to differentiate fake money from experts. Legal currencies entail microprinting, watermarks, color-shifting ink, and much more, which are significant features that help us spot legal currencies.
* Payroll Fraud
The entrepreneur who is new in the market often makes the mistake of hiring employees without a proper background check. Raghib Khan from IFAH advises doing background checks on all employees before hiring them, and this tends to help you know how to catch fraudulent behavior early on. Raghib Khan, and his team strongly urges you not to wait until your business has doled out huge sums of cash to start keeping an eye on things.
Entrepreneurs tend to face enough skepticism in the market. Their business model is doubted, funding always remains tight, and everything tends to worsen if a shady individual negatively destroys the credibility of the new company with any kind of fraud.
The situation worsens when a client and leads learn that you worked with someone who doesn’t exist, making the entrepreneur’s image gullible.
The best thing an entrepreneur can do is to remember to perform due diligence on any investor you are thinking of dealing with. Additionally, always be suspicious of anyone who tends to pressurize you to make a quick decision. Credible and legitimate investors and individuals will respect your decision-making time. Genuine investors will never be over-enthusiastic or aggressively try to strong-arm you into signing up for something.
Also, always be careful about revealing bank account details and personal security information to anyone.
Starting and running a business is a risky trade, and you are vulnerable to all kinds of scams and thefts in the startup market. Therefore, being informative about the types of scams happening worldwide with entrepreneurs can help you get away with the majority of them. Be sure to be a regular consumer of knowledge to protect yourself at all costs.
Raghib Khan is the Co-Founder and Director of RNF Technologies, a leading IT services and product development company. He has also co-founded several successful companies, including Phonato Studios, FNR Technologies, and Resourcifi. Prior to this role, he worked for AOL as a software engineer, where he was a key member of its e-commerce team.
Raghib has been invited to share his expertise at several tech events. With a special interest in mobile gaming and product development, he has shifted his focus towards strategy building and creating anti-scam/anti-fraud detection technologies.