HYIP stands for High Yield Investment Program

HYIP stands for High Yield Investment Program. HYIPs are investment programs normally offered via the Internet. HYIPs are popular because they typically accept investments of $100 or less while offering high returns. The introduction of e-currencies such as e-gold and StormPay has made it easy for HYIPs to operate across international boundaries, and to accept large numbers of small investments.
Many HYIPs have turned out to be scams. Scam HYIPs use the ponzi scheme approach, in which new investors provide the cash to pay existing investors, to the extent that existing investors chose not to leave their money in a HYIP. This approach allows the scam to continue as long as new investors are found and/or old investors leave their money in the scheme.
The turnover in HYIPs is high. For example, one website that links potential investors to active HYIPs has a "blacklist" of more than 500 HYIPs that have gone out of business.
HYIPs are frequently advertised in spam emails, since people are typically given a commission (for example, 9% of invested funds) when they provide a referral of a new customer.
HYIPs typically are not based in the United States, Europe, or Japan - countries that have strong laws against unregistered investment programs. HYIPs disclose little or no detail about the principals, management, location, or other aspects of whom is getting the money to be invested, and relatively little information (other than asserting that they do various types of trading on various stock and other exchanges) on how their investment programs actually work.

Interest rates

HYIPs typically claim to offer interest rates of 1% or more per day on invested funds; many offer much higher daily rates. Such high interest rates raise the question: why would any business that can earn such profits, legitimately, bother to look for small investors? Such unusually high yields should tip off investors that there are serious risks involved.

Private Investment in Public Entity - PIPE Investments

Private investment in public entity (PIPE investments) take a sizable position in publicly traded companies whose valuations have dropped since they went public and now are seeking new sources of cash infusion.

Early stage companies must normally rely on internal or angel investors for their source of capital. Private investors and venture capitalists want deals with a longer investment period and companies with established business models that have recently discovered a new market.

Private investment in public entity investments:
• Apply lower and more realistic valuations to early stage companies
• Supply the funds that the public entity needs
• And use the public markets as the investment exit vehicle