Glossary

Pyramid Schemes

A pyramid scheme is a fraudulent business model where an initial group of people recruit others to join their company, but charge them an upfront-fee in order to become an employee, and then urges those new employees to recruit others and get up-front fees from them as well. As new recruits join, their upfront fees go towards paying earlier members of the pyramid scheme, and so the goal of the business is really just to trick people into joining the company and paying this fee; the company may have an actual product to sell, but selling the product is often not the focus of this business.

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