The End of Faking It in Silicon Valley | Hacker News Reader

The End of Faking It in Silicon Valley

nytimes.com

53 pointsatombender16 comments

> After FTX filed for bankruptcy in November > > The company was so poorly run that it didn’t even have a complete list of people who worked there

FTX wasn't a "poorly run company", it was a ponzi created with the intent on defrauding customers and investors.

You read that article and it'd make you think the federal prosecutors making the original indictments and additional indictments (including bribery of officials) are smoking pot and seeing things.

Oh, wait. It's the NYT. They presented SBF, before it got exposed for the fraud he was, as an altruistic genius and they're still playing the "not guilty" angle.

People at the NYT have been intellectually dishonest on that matter since day one (including, after the fraud got exposed, setting up a conference where every in the room applauded SBF).

> They presented SBF, before it got exposed for the fraud he was, as an altruistic genius

Got a link for that?

The people who trusted and enabled Charlie Javice or Elizabeth Holmes are guilty, too. Trusting someone just because their story sounds good without due diligence is wrong, and unfair to people who do real work.

It really is surprising how little diligence work seems to have been performed. With how brazen most of these "Fake it to make it" startups have been, I have a hard time not agreeing with you.

I do think some of this equates to a pump and dump with investors and ultimately the buyer.

What due diligence are you going to bother to do as a VC when your own business model is built around slapping a pile of paint on a rickety structure of fabricated sales projections and selling that to to other people for 10-100x what you paid?

The whole VC system is fundamentally broken and is hurting actual value being created.

A certain number of venture capitalists achieved that status after having been well-funded founders, exactly by faking it from the beginning until their companies were actually (with good fortune) viable enough to sell for more than their investors had put up.

So many have come out so far ahead financially that way, there has got to be some consensus that it is a proven success model. For some I would say that is all they know about success.

I dunno. The enablers are VCs, and the people paying for it are the LPs. They're all big boys playing with risky investments. Unless the VCs are the ones committing fraud, I'm less concerned. All of these investments are limited to accredited investors for a reason: they're largely unregulated and lack supervision. That's what you're signing up for.

How come JPMorgan doesn’t get any blame for the Charlie Javice situation.? Under what circumstances is it appropriate to close that deal without validating customer data. You could have put it in escrow immediately before closing.

This was never what “fake it til you make it” meant.

The phrase the article used that I'd take to mean "fake it til you make it" was "business puffery." It's spouting vague BS no one could be expected to believe.

Who really believes this is "the end"?

Lower interest rates to 0% and faking it will come roaring back.

Prob. after 2024 elections.

> Investors are increasingly asking consultants like RHR International to help identify the telltale signs of “Machiavellian narcissists” who are more likely to commit fraud, said Eden Abrahams, a partner at the firm. “They want to tighten up the protocols around how they’re assessing founders,” Ms. Abrahams said. “We had a series of events which should be prompting reflections.”

Non-paywall: http://archive.today/1O6iC

tl;dr Investors/institutions who turned around term sheets in a matter of days waived due diligence during frothy times, or those that benefitted from this sort of behavior, now want their money back.

Edit: To make it more balanced:

Also, those that were showered with praise, money and prestige as the CEO of a darling company feel entitled to the value their 2020 projections promised and decided to prop up themselves or their company (or both) rather than face humility

Reply on news.ycombinator.com