This is a common problem with Megasquirt. Somewhere on google there is a page stating which USB to serial converters work the best as Not all work.
Best bet is to just use serial only, but newer laptops don't usually have a serial port!
If you cant get yours working you may need this converter:
61092 ADAPTOR, USB TO SERIAL PORT $ 53.63
available at CAPA
its an official Motec Part (apparently)
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