ut CEOs who skimmed a little off the top, but such behavior would not have been possible had proper fiscal controls been in place. And those are just companies that got caught crossing the legal boundary. Even companies that did not violate any rules often depended on questionable accounting practices such as emphasizing "pro forma" rather than generally accepted accounting principles (GAAP) profit numbers. The usual definition of "pro forma" was, well, whatever the reporting company felt like, since it was not a term with a legally specific meaning. Investors and Entrepreneurs Played Each Other for a Loss The telecom boom was largely about new business start-ups, some small, but some quite large. Start-ups generally happen when an entrepreneur gets capital The Great Telecom Meltdown from investors. The first investors, the "angels," provide seed money to allow the entrepreneur to flesh out the idea, while the first major funding typically comes from venture capitalists. (To be sure, many companies were started and funded by existing companies or by serial entrepreneurs who provided their own angel or even venture funding.) The venture capital process has some fairly standard practices, often involving multiple rounds, and typically ends when the venture firm either pulls the plug or cashes out. The exit strategy for a successful firm would typically be a public stock offering or a sale of the company. If the ven- ture firm pulled the plug by refusing further funding, the entrepreneur might attempt to find additional funding elsewhere, but if that failed, bankruptcy usu- ally resulted. During the boom, many entrepreneurs committed the fatal error of anticipating further rounds of funding that never materialized, and spending down their cash in order to grow faster, without having enough to last until the cash flow went positive. They were not prepared for the boom to end. But booms always end. That is what the business cycle is all about. Once an early investor funds a start-up, it has an interest in making the c