Yeah, they raise a massive round on traction from other YC companies then need to find the real Product Market Fit (enterprise and others) after that round. It's actually very inefficient

One of Micheal and Dalton video does address this

Even if you larp revenue, when you get acquired or go public auditors will figure stuff out. Or worse you go to prison. Its like cheating in college-youre just hurtung yourself and others

It's the YC playbook. I guess it works, Corgi for example a "AI" insurance company with like only 5 real engineers and a bunch of growth people. Their main customer is other startups mostly YC. Same with Delve.

I too was nervous until I clicked through and had a read.

The creator of this has a good note on how the Nvidia situation relates, under his diagram of their circular deal:

"To be clear: every deal here is legal, publicly announced, and defended by the people in it — Anthropic CEO Dario Amodei called the structure "nothing inappropriate in principle." Critics compare the pattern to 1990s dot-com vendor financing and warn it can inflate the appearance of demand. As Bloomberg puts it, a circular deal is legally different from a fraudulent "round-trip" — regulators' term for sham trades with no economic substance designed to inflate results. LARP is a joke about the round-trip. This is the legal cousin it rhymes with."

The moving of money across time is 100% central to money's value. Passing digital money around to cook the books is moving money... fraudulently. So yeah, they're not the same unless you're goaling on the semantic purity of the word "move".