Haha I guess most of us have gone through being part of a game group and it not ending well.
After reading all that RookieDev wrote, I think I understand what he really means and I have to agree with him. It is not about setting up a company, branding, or boasting to make yourself feel good. It is about misleading people.
Many times these ambitious game developers will use titles like "rapidly expanding International company" (just because they have 1 member from another continent), "game company that has produced plenty of game titles"(most in the development stages and then replaced by the next big idea, never finished a game). "Run by an ambitious professional with over 15 years experience in the field".....(I've been playing games for more than 15 years <img src="smileys/smiley17.gif" border="0" align="middle" />)
As everyone mentioned, there is nothing wrong with setting up your own company and group, but almost always it is the recruits and members that are fooled. I think many of us at one point has fallen for something like this, and it is an annoying and demotivating experience.
But that being said, perhaps out of 20 startups, maybe 1 might succeed, and that would still be a great thing to the gaming community. Haha I guess in the end, we just need to be careful in trusting what others say, and who we choose to work together with.