In the cutthroat arena of venture capital (VC) and startups, where billions of dollars chase the next unicorn, the line between genuine innovation and manufactured hype has increasingly blurred. An eye-opening experiment by Bhavye Khetan, an Indian-origin UC Berkeley graduate, laid bare how easily investors can be swayed by little more than buzzwords and prestige markers, despite knowing nothing of the actual product. His stunt, in which he posed as a fake founder and elicited interest from 27/34 VCs, shocks not merely because of its audacity but because it underscores a deeply troubling reality as many VCs prefer style over substance, hype over hard data, and FOMO over careful analysis. 1no2v
Khetan’s approach was deceptively simple. He crafted a sleek website, set up a polished LinkedIn profile, and peppered his cold emails with the current holy trinity of buzzwords like “AI-powered solutions,” “Web3 integration,” “decentralized data pipelines,” and the glamour of “Stanford” and “ex-Palantir” affiliations; while having no product, no team, and no working prototype.
Within days of sending 34 cold emails to top-tier VCs, 27 of them responded with varying degrees of enthusiasm. Some even requested follow-up calls to “discuss the opportunity.” In a viral post on X, Khetan revealed that not one of these VCs had bothered to call for a demo, press him on technical details, or examine any meaningful metrics because there was nothing real to examine.
The outcome of this social experiment has reverberated across Silicon Valley and beyond, reigniting a debate about whether VCs are truly in search of pathbreaking ideas or simply hunting for the latest buzzworthy craze. Khetan’s stunt suggests the latter one when investors see “AI” and “Stanford” in a pitch, they often assume credibility without ing the substance. What’s even more disquieting is that these VCs were not fringe players; they included established firms with multi-billion-dollar funds. Yet, despite carrying enormous responsibility for allocating capital that underpins innovation ecosystems, they willingly fell for a mirage.
This episode highlights an endemic problem in the VC landscape where a shallow vetting process that prizes surface-level glitz over granular scrutiny. Traditionally, due diligence was a painstaking affair involving months of market research, product demos, financial forecasts, and team interviews. But in the current frenzy, there’s an overwhelming drive to “get in early” on the next disruptive startup, often at the expense of thoroughly understanding what that startup actually does. As Khetan noted, the “game is rigged” in favor of those who can craft a compelling narrative, not necessarily those who can execute effectively.
Indeed, Khetan’s findings are not an isolated anomaly. As recently as April 2023, The Economic Times ran a scathing exposé titled “End of faking it for startups in Silicon Valley,” warning that the rampant “fake it till you make it” ethos was coming undone as investors began scrutinizing claims more closely amid a broader tech downturn. Fraud cases like the arrest of Charlie Javice of Frank and the conviction of Rishi Shah of Outcome Health only intensified skepticism. Yet, paradoxically, despite these cautionary tales, many VCs remain highly susceptible to pitches flushed with jargon, even when red flags abound.
For genuine founders, especially those without access to Ivy League pedigrees, glossy pitch decks, or celebrity endorsements, this syndrome is a grave injustice. Entrepreneurs who toil for years in underfunded labs, building real technology with actual , often find themselves sidelined if they cannot package their vision into the hottest buzzwords. In contrast, someone like Khetan, who simply dropped phrases like “decentralized data pipelines” into a handful of emails, can command the same attention. This reality perpetuates systemic bias that those with polished branding, elite networks, or trendy narratives get disproportionately funded, while those doing the real, unglamorous work languish.
Beyond the inequitable distribution of attention, this superficiality also shiver the broader startup ecosystem. 2y2959
Capital misallocated to hollow or shady ventures inflates artificial bubbles that eventually burst, hurting not only investors in general but also the stakeholders and the economy at large. Startups that get the gift of millions based on buzzwords alone often collapse spectacularly, eroding investor confidence in entire sectors.
And when these failures occur, it’s the downstream stakeholders like the employees, early adopters, and local communities who bear the brunt. Take the example of Gensol saga, where the startups founders are still sitting on their Camellias, where as, it is the employees whose salaries are on stake and the public at large, who miss the blue EV taxis! Yet Silicon Valley culture, incentivized by rapid exits and outsized returns, seems willing to overlook these collateral damages for a chance at the next decacorn.
Perhaps most disturbing is how little ability these VCs face when they reveal their gullibility. The infrastructure of VC with limited partnerships, a perpetual social hierarchy, and the allure of “insider” status, protects investors from the full consequences of their disastrous bets. Unlike public markets, where a failed IPO or bankrupt company can lead to shareholder lawsuits and regulatory lenses, private equity and VC operate in a relatively opaque room. Khetan’s stunt should have prompted resignations, major overhauls, and public reckonings. Instead, many funds quietly dismissed the experiment as a fluke or attacked Khetan’s ethics, deflecting from the core issue about how cheaply they value due diligence.
Consider the psychological drivers at work. VCs, by nature, are herd animals. When a few marquee funds start buzzing about “AI + Web3” startups, others fear missing out. To keep up, they prioritize volume, going through 100s of decks each week over depth. The ultimate logic is that if you see the same trend popping across handful of portfolios, voila, it must be legitimate. This herd mentality not only promotes mediocrity but also catalyses hype cycles, where sectors like AI, crypto, and bio are periodically overhyped, only to collapse into valleys of disillusionment.
It’s worth asking: what moral hazard does this create? When VCs can be duped by nothing more than buzzwords, they essentially encourage founders to game the system. Why build a working prototype when you can simply drop nine-figure valuation triggers like “machine learning” into a slide deck? This dynamic incentivizes superficiality, turning startup culture into a beautiful, mesmerising, beauty pageant where those who can shine the brightest, regardless of substance, get crowned. Real progress, innovation, and entrepreneurship take a backseat to a gaudy spectacle of coders-turned-marketers.
These repercussions extend even further. In emerging ecosystems like India, Southeast Asia, Africa, ambitious founders often look to Silicon Valley playbooks as a model. When they see Khetan’s success (or failure, depending on perspective) in fooling investors, they learn that conforming to superficial trends can unlock funding. Instead of fostering authentic problem-solving tailored to local needs like low-cost healthcare devices or education platforms, entrepreneurs in these regions may chase the latest global buzzwords, further distorting their local markets. Once funding dries up (as it invariably does for hollow startups), these economies suffer from a talent drain and capital flight, reinforcing a vicious cycle.
Yet perhaps the most disquieting aspect is how the myth of VC as a meritocratic engine remains unchallenged. VCs love to brand themselves as “partners” who co-create with founders; in reality, they often do little more than rubber-stamp buzzword-laden plans. Khetan’s stunt exposed that veneer: investors who boasted of decades in finance revealed themselves as gullible zealots chasing fad-driven “innovation.” If this is meant to be a system where the smartest ideas get funded, Khetan’s experiment suggests it’s more akin to a vanity fair.
What, then, is the way forward? First, VCs must rediscover the rigor of genuine due diligence. That means insisting on product demos, code reviews, customer interviews, and in-depth market validation, no matter how many buzzwords are flashed. It also requires acknowledging unconscious biases: for every pitch that name-drops Stanford, there should be skepticism rather than blind acceptance. Second, limited partners (LPs) need to demand transparency.
If LPs insist that their general partners publish clear metrics on due diligence processes, market analyses, and pipeline filters, it will be harder for VCs to hide behind hype. Lastly, founders themselves, especially those from underrepresented backgrounds, must refuse to conform to the prevailing cliché-driven model. Instead of becoming copy cat of Silicon Valley scripts, they should build ventures rooted in genuine customer needs, even if that means starting smaller and growing organically.
In an era when technology is supposed to democratize opportunity, the VC industry’s willingness to be duped by a pitch with no product is a glaring failure of imagination. The irony is stark as Khetan’s stunt shows, the biggest players in Silicon Valley are not the visionaries they pretend and claim to be, but, for all their professed acumen, remarkably easy to fool.
This scandal should not be an amusing anecdote; rather it should serve as a catalyst for deep introspection, discussions and learnings. Otherwise, the next decade will see countless hollow startups funded at astronomical valuations, only to collapse in a cataclysm more devastating than previous tech bubbles. For the sake of real innovators, underrepresented founders, and the health of the global tech ecosystem, VCs must confront their own credulity before it destroys them.
