Venture owners in Silicon Valley began to fear when presenting their projects because of the risk of being defrauded by inflating investor expectations. The newspaper writes about it New York Times.
“You can no longer pretend and exaggerate. Not only have funding for money-burning startups dried up last year, but fraud is also flying around as investors scrutinize applications.
According to the NYT, due to the crisis in IT, investors began to carefully check who used “fake” industry forecasts to create a positive image of the project.
As an example, journalist Erin Griffith cites Charlie Javis, founder of the Frank financial aid initiative. She was arrested for falsifying customer information.
Rishi Shah, co-founder of adware startup Outcome Health, was found guilty of defrauding customers and investors. Elizabeth Holmes, the founder of blood testing company Theranos, who defrauded investors, has been sentenced to 11 years in prison.
“This chorus of decisions made it feel like scam attempts in the startup world really had consequences. “Despite the many high-profile scandals of this generation, very few startup founders other than Holmes have faced criminal prosecution in the past.”
As more startup scams came to light, it concluded that IT investors were taking center stage in lawsuits, bankruptcy filings, and court statements by pretending to be the deceived victim.
previously online posted a screenshot just the resume of an employee he called the “biggest IT loser” in history because of his experience in bankrupt companies.