Three Simple Rules for Stealing my Money (fraud in startups)

The "qualified investor" bit is going to make sure that Cringely's scheme to advise investors will fall flat on his face and fail.

A very recent example of just why he's not going to be able to do that would be the Rothstein arrest in Florida.

Rothstein claimed that his investment scheme was going to buy up settlement annuities (you've seen the ads on TV: do you have some settlement you'd like to get a lump sum of cash for? from more legitimate companies). He required a minimum of $1,000,000 to invest, and used lots of political contributions to get close to political leader and gain credibility. Rothstein managed to swindle about $1.1 Billion out of suckers before finally getting arrested, although it appears that he went and hid about $200,000,000 in Morocco when he flew there in October.

http://www.miamiherald.com/news/breaking-news/v-fullstory/st...

Charging document: http://media.miamiherald.com/smedia/2009/12/01/12/Rothstein_...

Civil lawsuit filed last month by some of the folks who got swindled: http://media.miamiherald.com/smedia/2009/11/25/17/Redlined_A...

If desired, I can put a few more links here, because some of what he did was to hire Broward County Sheriff officers to guard him - claiming that people were trying to kill him. And he put a lot of money into getting the current BSO sheriff elected.

The best target customer for this sort of business would be angels, particularly unsophisticated angels. VCs have associates to do the due diligence grunt work, but angels have no such resource.