Analyzing data from Silicon Valley ventures and founders prosecuted for fraud

Post by lumost » Sun, Aug 09, 2026, 5:08 PM UTC

hn_throwaway_99 wrote: post #4

firasd wrote: post #3

A lot of 'numbers' startups cite are basically fake I think. Like if someone says we have this many users as a statement to TechCrunch you have no idea what they are actually calculating But there is a clear line that gets crossed if you start actually making a database of millions of synthetic users and that's what happened with 'Frank' that sold to JP Morgan and eventually the founder was prosecuted

> Like if someone says we have this many users as a statement you have no idea what they are actually calculating I think that's BS. User metrics are usually very explicitly defined (e.g. monthly or daily active users have always been clearly defined wherever I've worked, even if just for the sole reason that people collecting those numbers need to know what to count). User quality is definitely a gray area and estim…

Post by firasd » Sun, Aug 09, 2026, 5:11 PM UTC

neya wrote: post #10

I'm surprised there was no mention of Elizabeth Holmes. Whenever there is mention of criminal deception of any sort, she's like the poster child for it in my eyes. And I remember her accomplice who instead of admitting he was on the wrong side, kept blaming the journalist who tried to uncover the fraud, instead. He said (something along the lines of) "He (the journalist) kept coming at her.." as if she would've been…

Post by Zigurd » Sun, Aug 09, 2026, 5:21 PM UTC

umpalumpaaa wrote: post #15

Zigurd wrote: post #8

Earlier quoted context omitted.

In the current environment I doubt Elizabeth Holmes would go to prison. She would be saying the machine would work by early next year. After all a drop of blood is just a smaller quantity. Making the machine work is just an engineering problem. If she were really clever she would recruit a social media army of all the weird conspiracy theorists who think "medbeds" are real. Of course now we know that a drop of capill…

The big difference was that she was in the medical field. She used her machines that worked unreliability on patients and caused actual damage to humans. Then she noticed that this could be a problem and switched to blood analyzer from Siemens. But she still continued to say that the machines do work. She lied to investors. I still feel her case is a lot different to what musk is doing. I think you can definitely say…

Post by zbentley » Sun, Aug 09, 2026, 5:22 PM UTC

lumost wrote: post #12

hn_throwaway_99 wrote: post #4

Earlier quoted context omitted.

> Like if someone says we have this many users as a statement you have no idea what they are actually calculating I think that's BS. User metrics are usually very explicitly defined (e.g. monthly or daily active users have always been clearly defined wherever I've worked, even if just for the sole reason that people collecting those numbers need to know what to count). User quality is definitely a gray area and estim…

if someone says they have a billion users because they are connected to the doubleclick exchange... they aren't lying, they might be deceptive or simply foolish. As part of due diligence, the buyer/investor should ask how these numbers are calculated and make their own judgement. Unfortunately I believe startups select for those who dance the border of deceptive and foolish.

Post by sjsdaiuasgdia » Sun, Aug 09, 2026, 5:29 PM UTC

aliasxneo wrote: post #19

“Our theoretical framework captures how entrepreneurs facing minor, wide, and extreme expectation-reality gaps engage in evermore sophisticated efforts to detach the venture’s externally projected appearance from its actual operational reality.” Look, I’m not promoting fraud at all, but having been doing seed raising for the last eight months, there have been many times where I thought the only way to compete was by…