Criminal Deception in Silicon Valley

• 成果类型: Article; Early Access
• 署名作者: Weiss, Tim; Radoynovska, Nevena
• 署名单位: Imperial College London; emlyon business school
• 刊物名称: ORGANIZATION SCIENCE
• ISSN/ISSBN: 1047-7039
• DOI: 10.1287/orsc.2024.19981
• 发表日期: 2026
• 关键词: DARK SIDE; entrepreneurship; legitimacy; stories

摘要

With entrepreneurial fraud cases on the rise, we investigate how entrepreneurs carry out criminal deception, employing deceptive means to defraud audiences. Analyzing court data from Silicon Valley ventures and their founders prosecuted for fraud between 2000 and 2023, our findings reveal that entrepreneurs carry out criminal deception through a process of fac & cedil;ading: Entrepreneurs construct, perform, and protect illusory appearances (fac & cedil;ades) that externally project high-growth performance to audiences while masking ventures' actual underperformance. We identify three forms of fac & cedil;ading-surface, reinforced, and deep fac & cedil;ading-that are contingent on the severity of the gap that entrepreneurs face between audiences' performance expectations and ventures' performance reality. Our theoretical framework captures how entrepreneurs facing minor, wide, and extreme expectation-reality gaps engage in evermore sophisticated efforts to detach the venture's externally projected appearance from its actual operational reality. Practically, we propose several approaches to deter and detect criminal deception, including the extension of U.S. 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. We make contributions to literatures on cultural entrepreneurship, organizational wrongdoing, and the social effects of entrepreneurship.