I have a friend who was working on a big investment deal. It ended up going entirely south for him and he ended up losing well over 50% on his original investment.
I'm obsessed with investing and any investment story will yield a positive ROI in the form of knowledge and lessons learned. I told my friend about this - that if you look for the positive in the situation, you will find one and you will learn that there are so many lessons out there.
Using his deal as an example, there were so many red flags on this major deal. For one, the person on the other side of the agreement wanted certain rules and special treatment to apply to him from the beginning. That was red flag #1.
Next this guy was obnoxiously negotiating over a few % points on the finalities of the deal. This was the point of no return - my friend could have backed out of the agreement then and there but he decided to go forward thinking that the risk was much smaller than he anticipated.
So instead of telling this guy to shove it and forget the deal, my friend entered into an investment with very little guarantee, if any, that he would actually receive his investment $$ at the end.
It's comparable to me asking you for $20 and saying that I'll give you $25 in 3 weeks when I have the money, but we don't have any agreement other than a gentlemen's agreement that I'll return the money. That's a very limited agreement.
That's essentially what my friend did but instead of it being a loan of $20 to a close friend it was a much more significant amount of money being loaned to a mere aquaintance!!
The lesson here is: always know who you're doing business with and make sure that there is a guarantee to hold both parties responsible for their end of the deal.