What a great informative post! Thanks and thanks to Mahmud as well. - There are 'middle-men' in the VC world that sell their services to unsuspecting young com

What a great informative post! Thanks and thanks to Mahmud as well. - There are 'middle-men' in the VC world that sell their services to unsuspecting young companies in order to get them capital - so they say. The trick is that once they have your signature on a piece of paper that gives them exclusivity they no longer have to do anything. If you find your own capital they will claim their pound of flesh. I recently came across someone with biz plan (essentially one-person with a vague plan in his head and some details on a PPT) who has come here in Dubai in search of funding and exploring clients. I tagged along with this founder to a meeting with one such person - (I've never been involved even remotely with any VC/angels/startups - so I'm not really sure if I'm reading your description of middleman correctly) - and I was quite frankly there only to learn how these kind of deals/discussions take place. I was essentially a passive listener while the two of them discussed over coffee. I was surprised by how it went. He asked for a 7% stake via some kind of a nominee account in exchange of getting a funding of around $1M + some upfront commission % off the actual funds he could get, and 25% stake for the investors. More importantly he said something about this nominee account means he is not listed as a stakeholder in any of company's legalities (I got the impression that he'd not be held for any future liabilities, lawsuits etc) yet he'd share in the profits....that part was confusing to me. By all background checks, this guy seems like a well-connected investment consultant who has worked on bigger deals and he indicated this nominee stake thing in a off-hand way and said it was an industry norm. And all he would be doing was take this business plan and pitch it to investors in his network. And get this: there is no real way to even evaluate or even remotely guesstimate the worth of this business, because as I said right now it's just a plan in someone's head, a shoddy website and cheapjack PPT with nothing really fleshed out. What's the deal with this nominee stake thing? Certainly he needs to be compensated for his efforts but 7% sounded a bit too much. But what do I know. Can someone tell me, if this is how just deals take place? If so would you call this angel investment or VC? And apart from the funding size, is there any real legal difference between angel investors and VCs?