I got another call this week from a client who was trying to get me to convince him that investing with a friend-of-a-friend is a great idea. This time the pitch was, "I can get you into this deal for ten grand, but I need $4K by tomorrow. We can worry about the rest later." The product was a "franchise" opportunity and he promised to "get you the paperwork next week, but you gotta pay to play and time's a-wasting", or words to that effect.
There are too many ways this "deal" is wrong to really go into, but the first one is that federal law requires that anybody advertising franchise opportunities provide written materials at the first meeting. There's more to it than that, but you get the idea: franchise or not, "Pay me now and I'll get it to you next week" should ALWAYS be a red flag.
Another client is opening a new business and fronted a bunch of money for equipment which hasn't been delivered yet. In my client's defense, the guy was all smiles and promises when he was trying to get my client to buy. However, when the client asks the seller for a status, he gets anger and obfuscation (and no details on where the equipment is or how it's being delivered). People who get mad when you ask for details are also a red flag.
Some call it the still, small voice, others a nagging doubt, but what it often comes down to is your gut. Trust your gut. The adage, "If it seems too good to be true, it probably is" may be overstating things, but if it seems too good to be true AND THE DETAILS ARE FUZZY, run the other way.
*As always, the above is legal information, not legal advice, and you should consult with an attorney if you have questions because every case is different.