Sunday, April 14, 2019

How to Invest in StartUps

How Start-ups Investment Works

A group of investors tend to get together with a concept to an innovative solution weighing all the pros and cons to their new innovation. They come with some concept which would work and provide the revenue with their concept. The innovative idea then goes to the next level of turning it into a business and then goes to fulfill their goal of that idea. Here the need to obtain advice is essential from experienced entrepreneurs who have met success in the same field. To invest in initial stage startups there are two options:

  • To invest in a priced equity round, wherein the investor purchases shares in startups at a fixed price 
  • To invest in convertible securities wherein the amount of investment ultimately gets converted into equity. Capital – Needed Element
In the initial stage of startups, investors tend to depend on family, their colleagues or close acquaintances. However there could be some restrictions as to the number of individuals who could invest in these startups. This is due to legal limitations according to Legal Zoom. To start a business, capital is the much needed element and personal savings and personal borrowing are said to be the most two common possibilities for the same.

Personal savings are of two types namely cash and cash equivalent saving and retirement account. While personal savings could be utilised, the need of borrowed fund does not arise since the funds are already available for the start-ups. However there is a risk here since very often investor may not have the necessary subsidy for the startups. Moreover it could also be a gamble on investing their entire savings which may or may not succeed. The said funds could at a later stage in life,be utilised during retirement, or for any other purpose.

Personal borrowings could be beneficial for businessmen with good credit scores together with high personal disposable worth. Funds for the business can be obtained by way of personal loan or by applying for a new credit card. Here the possibility of the risk could be delay on payments, lowering the credit score and getting into further debt.

Crowdfund Capital Advisors – Crowdfund Investing Company 

As per Crowdfund Capital Advisors a crowdfund investing company, over 1,000 companies had registered with the SEC to raise subsidy on online portals where $137 million had been dedicated to such start-ups. Several start-ups had been subsidized in 80 various industries extending from restaurants to salons to logistics businesses. Some new portals such as Microventures, NextSeed, Republic, Seedinvest, StartEngine together with Wefunder, assist distinct investments in start-ups.

Progress Prudently & Cautiously

Some startups could generate disruptive novel products which could improve the economy. And an investor could face some risk by investing if he does not progress prudently and cautiously in the investment. Recent research has portrayed that more than 94% of fresh businesses tend to flop in its first year of startups. One of the common reasons is the deficiency of subsidy wherein money tends to play an important role in any business. Capital is the essential element which moves from a given idea to revenue generating business. Most of the entrepreneurs tend to get stuck due to this deficiency in their business. In startups, investment could be worthwhile personally as well as financially wherein there is a contribution in capital formation and creation of a job.

Concerns While Investing 

The following concerns need to be considered while making an investment in any startups business:
  1. Investment should be done in an area one is familiar with. It is the best option of reducing the risk and one should have an understanding of the market that the start-ups functions in. One must have a better insight while projecting the probable success of the business. One should also ensure that the business in question tends to have a mountable model enabling it to grow to a point which would provide the revenue back that had been pooled in investing. A couple of years back, Securities and Exchange Commission had employed certain procedures in enabling businesses to raise funds by means of crowdfunding for those interested in making an investment for start-ups. 
  2. You should do your own research in obtaining information and conduct your own diligence by scrutinizing the main documents, and ask questions regarding the management team.This will enable the investor in influencing your decision on the startups. 
  3. In order to consider which entity one should use in making the investment, the investor needs to consider certain factors like the tax structure, its investment portfolio, personal conditions. Funding in startups can be done by sole person or through family trust or Individual Retirement Account – IRA. 
  4. Before making an investment in any start-ups businesses, one should ensure to complete some of the paperwork needed like an ascribed investor questionnaire together with verification of the investor’s identity prior to investing into the company. 
  5. While investing, the procedure is to get into a signed agreement with the party concerned, which set out the terms of the agreement. The document in some cases are held in bond till certain criteria are fulfilled 
  6. Based on the arrangement of the deal, the investor can transfer the resources to an escrow account for security that is held by a third party till the release of the fund to the company when some of the conditions are completed. 
  7. The documents and/or funds are released to the company when the conditions of the bond are fulfilled. Take Stock of Expertise & Expectations
Opting for an investor is more important than obtaining the required subsidy. It needs a certain amount of commitment. According to Entrepreneur, one needs to take stock of the much needed expertise together with the expectations before approaching a certain investor. One should consider the recent dealings, together with the services provided, the expectation they may have for the leaders of the company and the level of involvement required in the overall operation of the company. It is also essential to have a definite exit strategy in order, for any kind of investment, especially in the case of start-ups. Investors need to be transparent on how and when they would be in a position to withdraw their initial investment together with the related gains.

Friday, April 12, 2019

Filing Your Taxes- Watch Out for Phishing Scams

Online Phishing

For a long time, taxpayers had been notified by the Internal Revenue Services – IRS, to be cautious of online phishing where in crooks impersonate the organization utilising fake emails, websites or text messages to get hold of sensitive information. Online phishing had beaten an agency’s `dirty dozen’ list with the most predominant scams, last month.

However scammers tend to do much more than deception as the Internal Revenue Services. Designing fake online accounting tools such as QuickBooks have been done by some and still others pretend to be tech support agents.

Over 100 websites have been discovered by cyber-security firm `Lookout’which had been registered and designed to trick people attempting to file their taxes. The objective of the domain is to hook enormous groups of potential victims. As per the Internal Revenue Services, over 135 million Americans had filed their taxes electronically last year.

Domains Created to Gain Login Credentials 

It was also observed by Lookout that online phishing by the tax scammers had begun early and in December dozens of the websites had been designed from the time people had started receiving their W-2 forms. It is said that some were also tricked in the United Kingdom.

Several of the domains seemed to be created to get hold of login details or sensitive information such as passport number through online phishing. While the other types persuaded users to download malicious software.

A basic scam which was discovered by Lookout, were sites which would copy accounting tools from the company Intuit. They design popular software such as Quickbooks and TurboTax. It is said that these sites tend to utilise similar domain names like the real ones, namely `quickbook’ or `’ Most of the time these domains are created with the intention online phishing and stealing the login details of the users for the genuine sites.


Approach of Attack – SEO Optimization

It was also discovered that a type of site appeared to fit a classic online scam during the tax term, posing to be tech support. Most of the users do not tend to use tax software often and hence it was useful for most of the users to use it for assistance while navigating through it. Online phishing sites, such as ` and `, unfortunately tend to wait for them.

According to security intelligence researcher at Lookout, Jeremy Richards, had stated that the approach of attack is an SEO optimization thing which means that the scams tend to catch users who could be navigating sites such as Google or Bing for assistance.

Support service posing as `support’ technicians at the 1-800 number listed at these sites usually ask for remote access to user’s system with the intention of stealing important information. Other tricks are to utilise the number to sell fake and unwanted software. Identical sites have also been created to imitate the technical support of Apple and the podcast Reply All did an examination in 2017, on similar tech support fraud.

Malevolent Marketing Network

Richard also found more than 50 tax connected domains belonging to the same malevolent marketing network. The modus operandi of the scam is not certain. However when the users visit the site, they are then directed to download malware concealed in the guise of software updates. This is a clever way of online phishing and getting hold of login details or sensitive information.

According to Richard, online phishing sites redirects the user to Google if they don’t arrive at the correct phishing trap, else they present a 404 error. Lookout utilised AI too designed in 2017 in order to get to know about the tax scams. This tool monitored the internet infrastructure organizations such as the companies offering free web hosting, for suspicious types of domains. With the help of this tool, Lookout located thousands of new online phishing sites daily and regularly cautioned companies whose websites were being hacked by the scammers.

Utilise Password Manager 

The tool was unable to provide clear information on the working of the same since it only watched for the websites. For instance if the scammer would send an email prompting the user to click on a fake IRS link, the same could be detected by Lookout though not the email. Richard commented saying `it’s like we see blood on the floor but do not know where the knife is’.

Some of the other scams reported, were found using social media in targeting users providing fabrication of fake tax breaks to gain sensitive information.According to IRS, these scammers tend to get in touch with users through mail and not through email. If one has not received a letter then it is uncertain of any electronic communication coming from the agency is genuine. Sincere tech support agents need not see the user’s screen or gain login information to assist the users.

It is always a good suggestion to utilise password manager rather than reusing the same password for various accounts. There is plenty to learn on the various operations of the scammers. However in the meanwhile users need to be cautious and alert with these scammers and be free from online phishing.