As an equity crowdfund investor, you live for those hot startup deals that promise big returns. But between the hockey stick growth projections and slick marketing videos, it’s easy to get seduced by startup founders telling a good story. Don’t let these sneaky startup tricks fool you out of your hard-earned investment dollars.

Red Flag #1: Hockey Stick Forecasts Leading Straight to a Checkmate

We all love to see those gorgeous upward sloping graphs showing massive future growth. But if the market size estimates seem inflated or the growth trajectory defies gravity, treat the forecasts as fiction rather than fact. Dig deeper into their assumptions before buying the hype.

Red Flag #2: More Sizzle Than Steak

A well-produced video with smiling customers and a feel good vibe seems promising. But smart investors know slick marketing should always take a backseat to substantive proof points like revenue growth, product metrics, and user engagement analytics.

Red Flag #3: An Audacious Vision Sans Experience

Having a bold entrepreneurial vision can be tremendous, but not if it’s detached from industry know-how and expertise. Make sure the passionate founder pitching you has actually built successful ventures or expertly managed companies in their target market before. Raw enthusiasm without relevant experience often leads to failure.

Red Flag #4: Misaligned Incentives

Savvy investors ask: What skin does the founder have in the game? If they hold onto super-voting shares or pay themselves lavish salaries while diluting your equity, that’s alarming. Ensure financial rewards and control align closely with stock ownership percentages.

Red Flag #5: Fancy Titles, Not Much Talent

Stacking the team or advisory board with ex-big company execs makes for nice resume candy. But all that glitters is not gold. Ringfence your investment until you verify those big titles actually come with relevant industry connections and functional expertise that maps to the startup’s business model.

The world of equity crowdfunding brings great potential rewards, but many snake oil salesmen too. Safeguard your investment by watching out for these 5 sneaky startup tricks designed to fool unwary investors into backing potential flops or money pits. Let caution guide your conviction.