[khazhoux]

Investors routinely entrust entrepreneurs with millions of dollars, after only some relatively-light due diligence. You'll meet for coffee first, then dinner, if you hit it off then more conversations, and eventually a term sheet. The investor doesn't ask for source code or technical documents, or subject the entrepreneurs to a rigorous examination to make sure it's not a scam. It's all based largely on trust.

[thesz]

I do not think that investors do not do background checks between coffee, dinner and more conversations.

On contrary, I do think that you put too much trust on trust.