Better Business Management & Planning Practices

I do recommend that anyone who asks for upfront fees must be willing to offer references or, in their absence, accept that the money be held in escrow by your attorney (with proper two-protection written into the agreement). If no references are available but the party claims to consistently fund through a party asking for upfront fees, they should be logically be willing to cover such costs under a separate contract.

It is particularly important that terms and conditions be completely settled in advance before any fees are paid. I have seen several instances where the terms and conditions that eventually came out were so onerous that no one in their right mind could accept it. This avenue allows some scams to continue. The "funder" has actually made an offer, but the client cannot accept it. If the upfront money is for due diligence, the client must legally obtain rights to results and the points of acceptability must be specified in advance. This is often the trickiest part and where references would solve the problem. I have seem several legitimate due diligence consultants hired by scam artists to fulfill the obligation that an analysis was done. The scam artist then sends the analysis off to somebody and then says that it did not meet their expectations.

Many intermediaries should know quite well that with the number of clients I have that if he would perform just once, perhaps by covering the upfront fees, then many would actually write him a check on my recommendation. The problem I worry about is that such agents may actually feeding the client to others or be a representative for the actual investors so he is not really direct and consequently cannot guarantee any performance. There are a lot of good quality brokers who have been bambuzzled by unscrupulous "investors" who use the brokers to solicit upfront fees on their behalf. Sometimes the broker gets a cut and sometimes not.

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