Criminal Deception in Silicon Valley

The useful part

With entrepreneurial fraud cases on the rise, we investigate how entrepreneurs carry out criminal deception, employing deceptive means to defraud audiences. Entrepreneurs construct, perform, and protect illusory appearances (façades) that externally project high-growth performance to audiences while masking ventures' actual underperformance. We identify three forms of façading—­surface, reinforced, and deep façading­—that are contingent on the severity of the gap that entrepreneurs face between audiences' performance expectations and ventures' performance reality.

How it works

• Practically, we propose several approaches to deter and detect criminal deception, including the extension of U.S.
• We make contributions to literatures on cultural entrepreneurship, organizational wrongdoing, and the social effects of entrepreneurship.

Details worth keeping

Securities and Exchange Commission surveillance and whistleblower program, investor due diligence reform, and dedicated entrepreneurship education interventions that clearly demarcate when entrepreneurs transgress into criminal deception.