Angel Investing Presentations and Nigerian Email Scams By Tom Tierney

17 October 2011

I received an email from Dr. Okonnote, a top official in the federal government contract review panel in

Nigeria. Dr. Okonnote describes a financial opportunity where I can earn 20% of $21M dollars for simply

providing banking information to use as a temporary banking facility for the central bank of Nigeria

(apparently, the government contract review panel in Nigeria requires foreign bank accounts to

temporarily store money in transactions – who knew? I’m sure it’s all on the up and up).

So, is this a worthy angel investment?

We have the “pitch”: 20% of $21M dollars for simply acting as a liaison for the federal contract review

panel in Nigeria. Obviously, like most angel investments I suppose this is risky, so that is why they are

touting such a great return.

We have the people or “team”: Dr. Okonnote (doesn’t designate what he is a doctor of, but obviously he

is titled) and his team is credentialed - “top officials” in the federal government contract review panel of

Nigeria. At the face of it, they seem to have experience and accomplishments.

Finally, Dr. Okonnote tells me this transaction is “100% SAFE”. OK, wait, “100% SAFE” is my “fail safe”:

there are no guarantees in life other than death and taxes, as they say. Of course, this is the infamous

“Nigerian Email Scam”.

But, how do angel investment opportunities and Nigerian email scams differ? Interestingly, there are a

lot of similarities:

High risk but promised high reward (large return on your investment)

Team members represented as experienced, credentialed and competent

The Market opportunity is huge: small success yields large return

Apparently no competition: this is a win/win!

What is an investor to do? The answer of course is “diligence” or “due diligence”: vet the offer or

“pitch”, research and check references of the team, do market research and convince yourself whether

the deal is as good as it might “seem” to look – whether Dr. Okonnote or the software firm down the

street.

Tom Tierney lives in Encinitas, CA and is a member of Tech Coast Angels (www.techcoastangels.com).

Also see http://en.wikipedia.org/wiki/Tech_coast_angels for more background information on the TCA.