My goodness, when I first started in 2010 I got calls or emails just about every day around 6-7am PST for a year. These guys represent toxic credit lines/loans aka convertible notes/debt or the death spiral, not the better kind found among private startups today e.g. SAFEs. Never accept money from someone that calls you if your a small cap unless you know someone that knows them and they are clean. I was taught that early on by the guy that first invested in MySpace because he had a public co which he used to make that deal through a small NYSE issue I remember.
The way to handle those guys is with some basic Sun Tzu stuff. Most guys would ignore them, but they are so fun to talk to for the lulz.
You have to be real careful because even if smart money gets wind that you have talked to these guys, you might be looking at owning a roach motel by the end of the year. These guys also have the ability to naked short your stock til the cows come home. Something you've got to track. They will sometimes do things like try to book a call through someone partner or shareholder and get an intro, then blab to some subnet of people that you're going to take the deal and mess things up for you while they still short your stock knowing it's going to take a hit just because their dirty asses got near you. They know exactly how dirty gloved they are. Avoiding people like them during trips to NY is also fun and games.
One more point, this is also the main way companies looking to raise money screw their cap table up because, it absolutely ruins their float - this due to the fact that 99% of the time they have to reissue more and more and more of their stock to these death spiral guys to pay them back on the loans after 6mos. The reason its named a death spiral is because the model of most of these crooks follows includes knowing that these fledgling companies are going to have a hard time raising combined with a model that is purely based on shorting these kinds of deals. Amazingly close to absolute fraud.
You really want long term partners and financing from friendlies that understand your long term vision and at least buy into it a little bit. And, what it takes to uplist or cross list to higher quality exchanges if your an OTCBB with a healthy story, volume and price relative to some actual revenue or large partner.
The way to handle those guys is with some basic Sun Tzu stuff. Most guys would ignore them, but they are so fun to talk to for the lulz.
You have to be real careful because even if smart money gets wind that you have talked to these guys, you might be looking at owning a roach motel by the end of the year. These guys also have the ability to naked short your stock til the cows come home. Something you've got to track. They will sometimes do things like try to book a call through someone partner or shareholder and get an intro, then blab to some subnet of people that you're going to take the deal and mess things up for you while they still short your stock knowing it's going to take a hit just because their dirty asses got near you. They know exactly how dirty gloved they are. Avoiding people like them during trips to NY is also fun and games.
One more point, this is also the main way companies looking to raise money screw their cap table up because, it absolutely ruins their float - this due to the fact that 99% of the time they have to reissue more and more and more of their stock to these death spiral guys to pay them back on the loans after 6mos. The reason its named a death spiral is because the model of most of these crooks follows includes knowing that these fledgling companies are going to have a hard time raising combined with a model that is purely based on shorting these kinds of deals. Amazingly close to absolute fraud.
You really want long term partners and financing from friendlies that understand your long term vision and at least buy into it a little bit. And, what it takes to uplist or cross list to higher quality exchanges if your an OTCBB with a healthy story, volume and price relative to some actual revenue or large partner.