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There's often a thin line between "startup founder" and "confidence man".
by mieseratte 9y ago
There's often a thin line between "startup founder" and "confidence man".
- edanm 9y agoNo, there isn't often a thin line. Most founders are not out there committing massive fraud. They may be doing a lot of marketing, and are probably promising things that still have to be built, but they're not out there lying that they have millions in revenue from contracts that don't exist, or falsifying demos.
- mieseratte 9y ago> Most founders Often does not imply most nor does it mean that there must be massive levels of fraud such that the SEC has to be involved.
- TheCoelacanth 9y agoRight. "We had $50 million in bookings this year" - Misleading because it seems like that should mean $50 million in revenue but all of the bookings were for 10 year contracts so it is really only $5 million in revenue, but it is not fraudulent because it isn't factually untrue. "We will be able to raise prices enough to be profitable" - Often optimistic to the point of delusion, but without a time machine it is not a statement of fact so it isn't fraud.
- marcosdumay 9y agoEvery founder is optimistic to the point of delusion. It's a requisite. Investors know how to deal with that. What they don't know how to do is deciding if "those complicated papers that use words you never even heard before say we can do X" is a lie or not.
- icebraining 9y agoHow so? Isn't that what due diligence is? You get a third-party expert (be that in accounting or biology) with a signed NDA, and have them verify those results. What they probably can't handle is outright fabrication.
- morogop 9y agoFact check: False. There is a material difference between lying and the type of framing and optimism that successful founders typically engage in. The line just isn't particularly thin. Elizabeth Holmes didn't have a minor accident. She deliberately engaged in serious fraud.