The Alternative Investor


Don't Get “Bernie Madoff’d”: Avoid Ponzi Schemes and Fraud - EP.05

Ep. 5

Today we’re talking about how not to lose your hard-earned money through fraud. One of the advantages of alternative investments are that they are less heavily regulated by the federal government — but that also means you have to do more work when you’re investing in alternative assets to make sure you’re investing in a legitimate opportunity.

This episode, we discuss a few things you can do to to minimize your chances of getting involved in a fraudulent scenario. We share our general tips and tricks to making well-informed decisions, what you should be looking for when initially investigating a sponsor on an alternative asset, and the actionable steps to take pre-close and post-close on a deal.

We hope you get access to many great deals — but don’t be a sucker. Before you put your money into a deal listen to this week’s episode. 

Key Takeaways:

[1:15] A few things you can do to minimize the chances that you’ll be getting into a fraudulent scenario, and the two ways of accessing alternative investments.

[1:54] Some things you should be looking for when you’re investigating a sponsor on an alternative asset.

[4:58] Pre-Close: What do on the deal before it closes (and before you wire that money over!) to help avoid fraud.

[11:03] Post-Close: Steps you should take after you’ve closed the deal to make sure you’re not being subjected to fraud.

[15:34] General tips and tricks to be smart while making these kinds of deals.

Mentioned in this Episode:

Bernie Madoff

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We Talk about a Purchase Agreement

Ep. 48
After 2 ½ years of looking for a software business to buy with my partner, I think we’re finally getting towards the end! And at the end of the due diligence process when you’re going to buy a company… you’ve got to sign a purchase agreement. This purchase agreement is the big contract; it’s the document that lays out all the final terms and conditions. And when it’s signed, the money is wired — and it’s official: you own the company.So because this is all so timely for us, today we’re going to be talking all about purchase agreements! In fact, we’ll be going through the actual 57-page document I received for this software business to explain each section to give you all an idea of what to expect when it comes to negotiating your first purchase and sale agreement!Key Takeaways:[:11] About today’s episode on purchase agreements![2:22] We begin looking at the 57-page purchase agreement word doc, starting with an overview of the table of contents and section 1, the glossary.[5:09] Reviewing section 2: the purchase and sale of parent shares.[9:40] Reviewing the following three sections that cover representations and warranties — first up, those concerning the company.[16:30] Next up, we take a look at the sections covering representations and warranties of the sellers.[17:55] Taking a look at the representations and warranties concerning the buyer.[18:58] Reviewing the section that covers the additional agreements.[19:52] Checking out section 7: identification and related matters.[23:03] Wrapping up the podcast with some final points about purchase and sale agreements![24:54] What should you be focusing on when negotiating these documents?[28:14] Thanks for tuning in!Mentioned in this Episode:Purchase and Sale AgreementFor More on The Alternative Investor, Check Out:TheAlternativeInvestorShow.comThe Alternative Investor on iTunes — Leave us a review!