Well I'm not a lawyer, but it seems to me that if you want to raise money on "promise of hope" as you said (which I'd imagine could be the majority of startups)

Well I'm not a lawyer, but it seems to me that if you want to raise money on "promise of hope" as you said (which I'd imagine could be the majority of startups), you just need to represent yourself that way. The way I see it, it breaks into 3 camps: #1: Saying you can do something you know you can't do #2: Saying you can do something you think or hope you can do #3: Saying you can do something you know you can do While there is a human behavior difference between #1 and #2, you're still misleading your investors, right? Like I said, IANAL, so I can't say whether or not it constitutes fraud, but it is still dishonest IMO.