HQ Global Investments
Letze Finance Groupe Watch for HQ Global's Due-Diligence Game

A Report on Dealing with HQ Global Investment, Atlanta, GA
Background:

My company has been in business since 1990. Since we can use some capital to expand the business, I posted my company's information on the internet. And that's when Mark Smith of HQ Global started to contact me. Our corresponding period was from January to May of this year. Why did it last this long? Because I wanted to find out how they played their game.

Chronicle of Events:
HQ Global emailed me saying that they were interested in funding all the money I requested—$9 million (I never provided any formal business plan on the internet). Once I responded, I started to receive a bunch of canned emails from thempretty sloppy in contents and repetitiveness.

When I request more detailed information, a self-claimed third-party analyst Al Dublin responded and explained that the major investor was from Luxembourg, Europe. The important requirement for me to do was to meet them in Atlanta.

To Atlanta is a three-hour drive for me and I go there almost monthly especially because my daughter lives there. Otherwise, with the sloppiness that HQ Global has demonstrated in their emails, I wouldn't have wanted to invest any time and expense to make the trip.

They wanted to meet me and my partner first in the hotel they recommended (Ritz Carlton in this case) before they would invite us to their office. Their reason for that was that they wanted to identify whether we looked right or not first. (What if we don't look right but having flown all the way from California to Atlanta already like someone did?)

At 9:20 am of February 21, Al Dublin found us in the hotel. We sat down and talked around one and half hours. I raised all the questions. We also talked about general things which have nothing to do with my business. Then, Mark Smith jointed in for about 10 minutes and collected the 10 copies of my so-called business plan. They then gave me a five-page Project Summary Evaluation Form to fill out and to fax back to them that afternoon, and told me to call them the next day to arrange another meeting in their office. What I wrote in the form was supposed to be evaluated by their London office's attorneys and some of them supposed to have Harvard's law degrees (according to Mark Smith).

I went to their Peachtree Street's office the next day. Dublin told me that they were making six offers that day. When it was my turn in the conference room, Dublin (the only person in the room besides me) started to use the white board to explain how their investment works for about 25 minutes. Then Mark Smith came in again to remind us the time was about up. The little conversation I had with Mark Smith, the principal, in these two days, I couldn't help noticing that he mentioned quite a few times about site inspection fee and due diligence cost that we had to pay, but no amount was specified.

A couple of days later after I came back from Atlanta, I received the letter of intent (LOI) through email from the so-called Letze Finance Group, which offered me $9 million for 49% of my company. The letter also emphasizes that they are excited about my project and rushes me to sign the LOI as soon as possible so that they can proceed with the due diligence, site inspection process, and then fund my project. (From my judgment about their behavior pattern, I am 100% sure that no one ever read the information I provided. And I know that the ten copies of my business plan have long made a short trip to the garbage can already, since they don't even have one person would or could read a serious business plan, let alone having ten staff involved).

The cost of due diligence is $45,000, which is supposed to be split 50/50 between the investor and my company. Apparently, the site inspection cost is not included in the due diligence fee. They also gave me an account number for me to wire the money.

Dublin suggested to me that if I didn't like the deal, I could make a counter offer. I made them a counter offer of $11.7 million for 39% of my company and asked for their references so I could do my own due-diligence checking. Al Dublin later responded that they would accept my counter offer. However, when they finally provided me with three references and a new LOI, the content of the new LOI is exactly like the old oneso sloppy.

When I told Al Dublin that HQ Global's references didn't check out, his response was I am not sure what you mean by the references don't check out. These are real people with real projects that got done.

Maybe what is the problem is that HQ and Letze are simply not the investment group that you are looking for.

My response to Dublin was not to give me up so easily. And that's the end of the events.
Analysis of the Case

I don't intend to write a thesis depicting the play-by-play what I have observed about HQ Global's scheme and then do a detailed analysis. However, from sharing my experience dealing with HQ Global, maybe the next entrepreneur can decide whether he or she would want to go through the process to fool with the same people. My motivation is very simple. I was beat by a crooked customer big time once, and I blamed some people who could have warned me about the crook but didn't bother to do so. Therefore, I determine not to do the same.

The following are what I see wrong with HQ Global's practice:

For any so-called venture capitalists such as HQ Global that would so casually offer a face-to-face interview at your own expenses, then promise a large sum of funding without even going through any discussion on the business plan, or demonstrating any knowledge about your project, some thing is ridiculously wrong.

In order to claim their legitimacy, even they could fund a small percentage of companies which ensure quick and high returns, how could they so readily collect the so-called non-refundable due-diligence fee in such a huge amount, even they know that they would and could easily reject most of the cases as unqualified?

It is beyond imagination that HQ Global seems having unlimited capital to offer, but operates in such a sloppy way with their canned emails and operating procedures.

If the letter of intent of the Letze Finance Group had been written by some Harvard-trained lawyers, then the Harvard Law School is not worth to attend.

The most ridiculous act that HQ Global has demonstrated is about giving their references.in the business world, even if we need a $50 credit from a vendor, our credit history has to be checked out first. The irony is that HQ Global wants us to pay $25,000 to check us out, but they are so reluctant to subject themselves to be checked even we don't charge them anything. I checked every lead that HQ Global revealed to me, which includes Luxembourg Embassy in D.C., Letze Finance Group's existence and street address in Luxembourg, their $2 million investment in Atlanta, $20 million investment through TIG, and $45 million investment in an herbal medicine manufacturer in China.

My references-checking results are the following: 1) The Luxembourg Embassy in D.C. Referred me to their New York office. After they checked and found no such company as Letze Finance Group and not even the street address in Luxembourg, they warned me to watch out. 2) I finally found the lady in Atlanta, who is supposed to have received $2 million from HQ Global. She said the she was financed by HQ Global to renovate her exercise club (a major investment?), and then sold it subsequently but wouldn't give me the name and address of the club. She asked for my number so she could call me back to talk more, but never did. 3) The TIG is apparently a broker in Las Vegas. The guy didn't want say much except that he had two clients, one in Greece and the other in South Africa were getting some finance through HQ Global about a year ago (About a year ago? Is this the best reference HQ Global could come up with?). 4) The $45 million investment in China is the most ridiculous one. HQ Global only gave me a funny email address by saying that these people in China don't speak good English. After I emailed and offered them that they could use Chinese, since I could find an interpreter (Actually, I speak Chinese better than I do in English). I also specifically asked them to give me their telephone number and address in China. Three days later, I received an email from this so-called Chinese company, but the origin of the email was not China, it's from the US.in their email, they welcomed me to visit them in China. I promptly replied that I was taking their offer and coming. I never did receive the 2nd email from them again. HQ Global is just too sloppy, lazy or short handed to modify their transcripts; even they knew that I was a Chinese-American.

Concluding Remark

When entrepreneurs need outside funding badly for surviving or expanding, we tend to have a lot of wishful thinking that could easily affect our common sense or judgment. Fraudulent people never would or could give straight answers. As long as we can make sure that we are not trying to imagine right answers for them unconsciously, then we should be doing all right.

Since HQ Global is my first ever experience dealing with a self-claimed venture capitalist, so even I smelt something wrong early on in the process, I still played along with them to see how it developed.

Whether HQ Global's practice is a scam, I will leave that to you and maybe the

Atlanta's Attorney General's Office to decide. For other HQ Global related information, one can visit usacomplaints.com.

Company: HQ Global Investments
Country: USA
State: Georgia
City: Atlanta
Address: 3455 Peachtree Rd., 5th Floor
Phone: 6787722209

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