With that many red flags, why would anyone accept an investment and enter a relationship with such an organization? The things people will do for funding... I'd rather have a day job or a consulting gig in a heartbeat compared to a situation like that.
In college I flailed around for funding for an idea for a bit. I accepted the first offer I found. Said "investor" jacked half of his money back out of the account (he needed a card because he was supposed to do some work on the financial end) and spent it on parties and shit. Very similar tendencies to what was described in the article and lots of the same red flags. He then threatened to sue me if I talked about the whole thing. Thinking about posting the whole story somewhere.
But the broader point is: if you need investment and can't find anyone else, it's very easy to convince yourself that it won't be as bad as it will.
