I've had the misfortune of working for someone in New York City who was running a similar operation. But I think he stays just inside the law. He announces that he has a seed fund for startups. He spends all of his days pitching investors. He then pitches his ideas, usually working in concert with one or more partners. He then hires 2 or 3 programmers to work on the idea. He pays himself very generously for his leadership skills. For one of his projects, he might raise $100,000 in 3 months and then pocket $20,000 as his fee for providing leadership. The rest goes to the programmers. And he might have 3 or 4 such projects going at the same time.<p>Technically, this is not a scam. He raises money and spends most of it trying to build startups. But I did have the sense that his focus was very different than what I expect of most of the Hacker News crowd. I had the sense that he didn't really give a damn whether any of his projects succeeded. He was making a very good living just raking in dollars from investors. And of course, if the investors are dumb enough to give money to him, then in some sense they deserve what they get.<p>I recall that for all of the many meetings we had, he never mentioned customers a single time. He only talked about investors. He talked a lot about "the deck" (the PowerPoint presentation he would use to dazzle potential investors), which he constantly tweaked and polished. His only interest in the programming was to show some progress so that he could ask for more money. And then after a few months he would claim that the idea had failed to show traction, and he would move on to the next idea.<p>Any boom will attract a certain number of parasites. I had the impression that he was manipulating the rhetoric about a tech boom in New York City to sell the idea that investors needed to get in on the action, via him.<p>It was intriguing to realize that this was even a possibility. For me, when I'm part of a startup, I'm generally willing to sacrifice some of my current income for the sake of seeing the startup maybe succeed. But this guy was playing the opposite game.<p>He was very smart. And he invested enough of the money raised that no one could accuse him of running a scam. And yet, I had the impression he was just barely legal -- just barely doing the minimum so that no one could accuse him of running a scam.<p>He did have one success in his past, which I think made his whole operation possible. He was sort of like the aging actor who had a popular show 20 years ago and nowadays does infomercials. That one hit gave him the credibility to run his almost-scam.<p>Anyone involved in the startup world should be aware of operators like this.