By Martin Zwilling

Some aspiring entrepreneurs are so desperate for funding, or naïve, that they ignore the obvious signs of scams and rip-offs on the Internet, praying for a windfall. One would think that with all the sad stories and tools published over the past twenty years, this problem would be behind us. But people are still begging for more technology or laws, often to protect them from themselves.

As examples, I present my list of ten of the most common ways entrepreneurs can be victimized by ignorance or greed, based on questions and stories I get from entrepreneurs and associates. Most of these are easy to avoid if you do your homework up front, but can cost you dearly if you get sucked in. Use the common sense suggestions to avoid the pain:

Decoy investor scam. Here someone who is not a registered financial broker contacts you on the Internet, tells you about all the people they know with money, then turns around to ask for a “retainer” or fee to cover their time and efforts. No real investor or venture capital firm asks for money from the company they are intending to invest in.

Off-shore unsolicited investor offers. Unsolicited foreign investors that contact you on the Internet need extra scrutiny. If you feel confused by conflicting time zones, differing currencies, and up-front costs, it’s time to run the other way. The SEC and local law enforcement agencies can’t help you much with foreign scams.

Deposit required to hold your terms. In this scam, you are offered a very attractive term sheet due to close in 90 days or so, with a deposit required to hold your position while due diligence is being conducted. Don’t count on ever passing due diligence, or even getting that deposit back. Professional investors don’t work this way.

Loan offer in lieu of investment. Watch out for unsolicited loan offers via the phone or Internet that seem to offer quick approval, but require mandatory “premium fees” or “processing fees” up front, payable by money order or electronic transfer. Even if you pay the fees, you probably won’t see the money and won’t find the lender.

Phantom fund investors. These solicitations, usually via the Internet, claim to represent a large fund that they can’t disclose, until you have been “qualified” for the investment. They promise to provide all the info at the time of close, after you sign a non-disclosure agreement. The close will never happen, but you will be stuck with large services fees.

Pump and dump stock schemes. Don’t fall for claims from “insiders” who offer stock that you can turn around quickly. It’s usually stock that has been artificially pumped up by their big buy, who take their gain when you buy, and leave you with a big loss on their dump. A variation is “short and distort”, where their profit comes from short selling.

Work at home to fund your startup. Beware of any offer that asks you to spend money before you can make money, to buy a starter kit, education, or tools. For more details, see this recent article from the The Penny Hoarder outlining the most common pitches to avoid.

Cash transfer assistance funding. I continue to be amazed that some government agency reportedly still gets 100 calls per day from victims of the Nigerian unclaimed cash scam alone. People who fall for this one must be really greedy. The best answer is the age-old wisdom that if it sounds too good to be true, it’s not true. Delete the message.

Chain emails leading to a windfall. This is the classic pyramid scheme where you get an email with a list of names, asked to send a few dollars to the person at the top of the list, add your own name, and forward the updated list to a number of other people, resulting in a huge return to you. You risk being charged with fraud if you participate.

Won the lottery. How can you win a lottery you never entered, usually in another country? A simple inquiry or response to one of these emails will get you permanently tagged as a prime scam candidate, meaning a flood of new deals. Delete these quickly.

Beyond the cases mentioned here, if the message or approach sounds suspicious, I recommend you visit Snopes.com, a website detailing thousands of known scams and hoaxes. With this website, and about 75 others like it, I find it hard to believe that user naïveté is the problem.

If people could get past their greed, hubris, sense of entitlement, and use common sense on the Internet, these problems would fade away due to lack of return. I’d much rather see your entrepreneur resources and energy focused on real opportunities to improve the world we live in.

Veteran startup mentor, executive, blogger, author, tech professional, professor, and investor. Published on Forbes, Entrepreneur, Inc, Huffington Post, etc.

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By Patrick Mwebaze

The Government of Uganda’s objective to borrow external resources is valid to finance infrastructure projects as stipulated in the Vision 2040, the 2nd National Development Plan (NDPII) for 2015/16 to 2020/21 period and the public sector investment plan.

CSOs recognize government of Uganda’s efforts towards prudent management of public resources including debt resources as guided by key policy, legal and institutional regimes such as; The Public Financial Management Reform Strategy 2018, Public Finance Management Act 2015 (as amended), The Public Private Partnership Act (2015), Public Debt Management Framework 2013, Annual Medium Term Debt Management Debt and Cash Management Department at ministry of Finance.

CSOs commend Government towards capturing sector debt figures and consolidating a national sovereign debt position, mainly through Ministry of Finance (MoFPED) and Bank of Uganda. Whereas Government and some other institutions suggest a debt portfolio of US $10.5 million (approximately Shs41.3 trillion), this is on account of disbursed and outstanding debt (DOD). Beyond DOD, this narrative often does not account for: undisbursed debt, recoverable debt for instance, due to private sector capital investment in oil and gas exploration; domestic arrears had increased from Shs1.4 trillion in Financial Year (FY) 2014/15 to Shs3 trillion by end of FY 2016/17, contingent liabilities- having increased from Shs6.5 trillion in FY 2015/16 to Shs 7.5 trillion in FY 2016/17

Land Compensation

Over Shs4.9 trillion by beginning of FY 2018/19 was already accumulated in Land compensation. Its little wonder, therefore, that the following institutions of Government and associates give contradicting figures of the debt situation; Ministry of Finance with total debt stock at Shs 41.4 trillion (US $10.7 billion) in June 2018; Bank of Uganda at Shs42.4 trillion in October 2018 and others.

UDN contends that the suppress of the debt figures too, by institutions such as the International Monetary Fund (IMF) World Bank Group (WBG) is drawn from their motivation to lend to developing economies including Uganda and their impartiality risks being impaired.

Meanwhile, the UDN computation puts the said various categories of Uganda’s debt situation at excess of US $15.2 billion (approximate Shs52 trillion) by beginning of FY 2018/19 July 2018) against Uganda’s GDP value of US $26 billion, which represented a paltry 0.04 per cent of the world economy in the same period.

However, the capacity to utilize, absorb and manage; and sustain borrowed resources in relation to repayment, Balance of Payments (BOP) and domestic revenue mobilization are imbalanced. The BOP position has been characterized with fluctuating, but recorded negative returns for the past 4 years, average economic growth of 4.5 per cent for the last five years and revenue to GDP ratio stagnation at approximately 13 percent amidst increasing borrowing. The trend of rising debt accumulation has continued with limited effective solutions to address causes of indebtedness.

Both Government and associate institutions should profile the comprehensive sovereign debt portfolio for Uganda, upon which appropriate policy and programming measures are accordingly formulated, updated and implemented. Challenges around changing debt architecture and current funding modalities notwithstanding, Uganda should be strategic and not in a rush to the so-called 50 per cent debt: GDP threshold, to moderate such risks as: Front-loading future funds (such as anticipated oil revenues); Default on debt payment; and endangering future Uganda’s generations and development.

The writer is the Executive Director of Uganda Debt Network (UDN)

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