While startups are essential to innovation, there is a darker side. Fraudulent startups range from investors who give a startup a term sheet with no capital behind him, to an entrepreneur who builds a team, signs contracts and sometimes raises millions of dollars with nothing but air.
This article identifies patterns that indicate that the start is fraudulent: the entrepreneur or investor spends a lot of time talking about himself and his astronomical accomplishments; unrealistic promises; non-stop sales; compulsive name dropping; money, or lack thereof; and illogical excuses.
https://www.entrepreneur.com/article/295304
Recently, CEO of Tech Startup WrkRiot was convicted of Fraud. Founder, Isaac Choi, displayed many of the above patterns. He lied about his name, falsified his educational and professional history and personal wealth, and scammed at least a dozen employees before being caught by authorities.
http://www.sfweekly.com/news/ceo-of-tech-startup-wrkriot-convicted-of-fraud/