So inexperienced people are handed giant piles of money and told to flout traditions, break rules, and employ magical thinking. What could possibly go wrong? “We hope that entrepreneurs bend the rules but don’t break them,” McClure says. “You know the saying ‘There’s a fine line between genius and insanity’? There’s probably a fine line between entrepreneurship and criminality.”
Most of the frauds reported on the news are financial frauds. The push for sales, the need to get more customers and deposits naturally force the sales people to start thinking of “alternative” ways to win. Well Fargo is a good example.
So it is very normal, when VCs start to chase for higher growth and higher traction, the startup founders (like the sales people) start to think creative ways to win. As a founder, we want to delivered results, we do not want to disappoint. Everybody wants to win, who dares to say that they are “alright with losing”.
The question here should how fast the growth should be? It is a long term or short term game? If investors are expecting huge growth in a short span of time, it is Very Normal to start “cheating”.
My 2 cents.