• by Ray Schultz , Columnist, August 5, 2019

Academics seem to think they have immunity from the rules saddling the rest of us.

Two professors — one from Stanford and the other from the University of British Columbia — sent 80,000 emails offering startup investment opportunities to venture capitalists, Stanford Business reports.

But the start-ups and the email were fake. The purpose of this exercise was to determine whether Silicon Valley investors discriminate against startups founded by women and people of color.

A laudable goal, but no good can come from the sending of bogus emails designed to entrap people into revealing potential behaviors. If a brand marketer did it, the uproar would be heard from San Jose to Brussels.

Speaking of Brussels, we wonder how this would go down in light of GDPR. Britain’s ICO has sued people for less.  

As security experts have reported time and again, the world is awash with business email compromise (BEC). attacks. Cyber felons pulled down $300 million a month in 2018 with BEC emails against financial institutions alone, according to Financial Crimes Enforcement Network.

And now here come Ilya A. Strebulaev of the Stanford School of Business and Will Gornall from the University of British Columbia to add to the flow of spurious email. 

Worse, these professors assigned grad students to create the emails -- in effect training them in the arts of wire fraud.

The students were asked to “create email pitches from fake startups offering a promising product or service,” the article states. 

With feedback from investors, the professors selected the 50 strongest pitches, representing such industries as energy, healthcare and information technology. 

They also invented 200 founders, each one purportedly a graduate student at a prestigious university.   

For the first names of these nonexistent students, they started with “the 1,000 most common baby names in the U.S. in 1995 and removed those of ambiguous gender, like Taylor and Alexis, and those that could sound Hispanic or Jewish, like Maria or Alexandra,” the article says. 

What they sought — and what they used the 2010 U.S. Census to find — was a sampling of the most common surnames “primarily associated with white or Asian people.” 

The article doesn’t state whether they used permission-based email lists, or where they got the addresses. Presumably, they used legitimate domains from their universities. But even those can be easily spoofed these days. 

Of course, you’ll want to know the metrics. Out of 80,000 emails sent to 28,000 VC outfits, they got around 3,000 bites, meaning that the victims — uh, the recipients — suggested a meeting, phone call or request for more information. Not a bad response. 

Now that we’ve had some fun at the professors’ expense, you may as well know the results. They were unexpected.

“Entrepreneurs with female and Asian-sounding names received a higher rate of interested replies than their presumed male or white counterparts.”

That doesn’t mean there’s no discrimination. But the profs say more research is needed. “The details are top secret, lest any investors catch wind of the experiment,” Strebulaev says. We bet.