This is the best summary I could come up with:

In the latest example of a startup getting caught while taking Silicon Valley’s “fake it until you make it” ethos far beyond the realm of ethics, events planning app IRL was recently sued by its own investor, SoftBank, after an investigation revealed that 95% of the app’s users were fake.

It’s the larger companies that usually get the most attention for screwing up — as this lawsuit highlights — but younger startups are now increasingly getting caught in the act, too.

Sure, investment firms focused on later-stage startups do have more data to study — and resources like auditors — to conduct due diligence.

But Angela Lee, a venture capital professor at Columbia and the founder of 37 Angels, said there are actually numerous ways an early-stage focused firm can detect and avoid startups that are trying to deceive them.

Lee said an easy way to see if you need to dig deeper into a startup’s metrics is to gauge how founders answer questions during the pitch.

Entrepreneurs look to put a positive spin on things and put their most favorable numbers on their slides for the pitch, Lee said, and while they don’t necessarily intend to deceive, founders should be able to answer questions about the numbers and metrics they left out.

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It’s always been bizarre to me how poor the actual due diligence is on non-financial stats of early-stage startups. Worse, one sometimes gets the feeling that investors want that kind of risk-taking, particularly in boom times, when they need to deploy capital almost as much as founders need to raise it.