Fine line between articulating a vision well or marketing vs just lying.
Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
41–50 of 102 posts
Re: Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
#42“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…
Was it fudging expected numbers (forecast), or fudging actual numbers (revenue, etc)? VCs are looking for a long-tail, if you have a 1% chance at 5B - 1T market, this is more interesting and impactful than 10% chance at 5M market. And yes, 1% chance of success is considered to be unrealistic by common sense standards.
From my experience they wanted you to demonstrate enough metrics that would have justified NOT ever getting VC funding. It feels like they are just becoming lazy.
Re: Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
#43Isn't venture capital just playing along too, though? They also benefit from all the myth making and hype storms, even if they are technically getting defrauded while funding it.
They could actually audit the companies they invest in, and go after the frauds. The Nikola example is a great one--if anyone had looked carefully behind the marketing the fraud should have been obvious. But by and large they don't, really. Seems to be a tacit endorsement of the behavior.
Re: Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
#44"Entrepreneurs construct, perform, and protect illusory appearances (façades) that externally project high-growth performance to audiences while masking ventures’ actual underperformance."
This would accurately describe a some of the startups I've worked at. ;-P
Re: Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
#45A 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
The oh so celebrated "Fake it till you make it"
Re: Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
#46I think this is accurate and a reflection of the pathological insecurity that leads someone to want to start a startup.
Re: Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
#47“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…
What is nontraditional? Seems like it could be even more rife with fraud with lower oversight.
There’s more to capital than dilutive capital
But yes lots of ways to lose money with even less recourse
Re: Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
#48This is what Stanford kids do. Read "How to Rule the World: An Education in Power at Stanford University" by the theo guy.
Re: Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
#49“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…
What is nontraditional? Seems like it could be even more rife with fraud with lower oversight.
Probably a bad qualifier. Maybe non-VC would have been better. Myself and my co-founder are trying to raise via a syndicate of like-minded investors/angels in lieue of the "traditional" VC dance.
Re: Analyzing data from Silicon Valley ventures and founders prosecuted for fraud
#50Earlier quoted context omitted.
Are you a biochemist? Would the Theranos machine have worked with new tests using new reagents? Is the needed blood volume not similar to, for example, payload capacity? Are we discriminating against people who affect an unusual voice?
It wouldn't have worked, period. You can't use capillary blood for the kind of blood tests they were claiming to. It's statistically impossible because the sample isn't big enough and drawing more capillary blood doesn't improve the SNR. Two samples taken at the same time from different spots on the same finger can yield wildly different results. Everyone in diagnostic medicine knows this (they've been dealing with t…
It’s not a lack of due diligence, it’s a lack of prosecution of fraud. They think they can just unload to some sucker for a big payday. See also the entirety of cryptocurrency.