4 ms·

Between this and the "wireless energy over ultrasound" scam I'm starting to wonder if VCs actually do any due diligence at all.

raverbashing 11y ago
I bet they pour over and nitpick lots of minor details on the financials Tech? That's for the nerds. The light is blinking so it's fine I guess
- 7Figures2Commas 11y ago
  > I bet they pour over and nitpick lots of minor details on the financials What financials? Lots of these companies have little to no revenue.
  - mmahemoff 11y ago
    Projections up and to the right.
    - erobbins 11y ago
      "this graph looks like a hockey stick, how's $50 million?"
      - cowsandmilk 11y ago
        to be fair, their competition has well-known financials. The size of the existing market for blood tests is already large; any penetration would give you a sizable business.
        7Figures2Commas 11y ago
        "If this company obtains 1% of a $500 billion market, things will be great!" is not due diligence. Here, everything realistically comes down to the technology because the company's ability to gain and sustain market share is almost wholly dependent on it having a superior technology.
      - PhantomGremlin 11y ago
        Some cliches never go out of style. I was at a startup in the mid 1980s and the words "hockey stick" came out of the CEO's mouth quite often. Edit: BTW that mythical hockey stick quarter never did arrive.
  - raverbashing 11y ago
    The ones on the business plan
Netbeing 11y ago
Not all VCs are equally (in)competent. I've always felt that one of the root causes of the ~2000 dot-com bubble was a proliferation of incompetent VCs chasing the glut of investment capital. Things seem roughly the same these days, or maybe even worse, since the eventual-rationality of the public markets can't come into play if there's no IPO.
- pen2l 11y ago
  The first VC who backed Theranos is a pretty smart guy. Was first in his class at Stanford, has an otherwise pretty nice portfolio of companies he has funded
  - majani 11y ago
    First in a Stanford class can still turn out to be an incompetent VC who doesn't do due diligence
    - pen2l 11y ago
      The guy is still a winner though: https://en.wikipedia.org/wiki/Steve_Jurvetson https://en.wikipedia.org/wiki/Steve_Jurvetson He's made more good investments than bad at the end of the day.
  - erobbins 11y ago
    My take on this is that theranos started out with good intentions, and just hasn't been able to make it happen so they are trying to buy time. The early stage investments were probably sound, but later rounds are a little questionable. Sometimes you have to know when to fail.
mrtron 11y ago
Which wireless over ultrasound scam? I haven't seen anything about that one.
- OopsCriticality 11y ago
  uBeam---the laws of physics are not favorable to their technology working as claimed.
  - Florin_Andrei 11y ago
    It would work pretty well underwater.
    - meatysnapper 11y ago
      and that sort of technology has been used by the Navy since how long?

raverbashing 11y ago

I bet they pour over and nitpick lots of minor details on the financials Tech? That's for the nerds. The light is blinking so it's fine I guess

7Figures2Commas 11y ago
> I bet they pour over and nitpick lots of minor details on the financials What financials? Lots of these companies have little to no revenue.
- mmahemoff 11y ago
  Projections up and to the right.
  - erobbins 11y ago
    "this graph looks like a hockey stick, how's $50 million?"
    - cowsandmilk 11y ago
      to be fair, their competition has well-known financials. The size of the existing market for blood tests is already large; any penetration would give you a sizable business.
      - 7Figures2Commas 11y ago
        "If this company obtains 1% of a $500 billion market, things will be great!" is not due diligence. Here, everything realistically comes down to the technology because the company's ability to gain and sustain market share is almost wholly dependent on it having a superior technology.
    - PhantomGremlin 11y ago
      Some cliches never go out of style. I was at a startup in the mid 1980s and the words "hockey stick" came out of the CEO's mouth quite often. Edit: BTW that mythical hockey stick quarter never did arrive.
- raverbashing 11y ago
  The ones on the business plan

Netbeing 11y ago

Not all VCs are equally (in)competent. I've always felt that one of the root causes of the ~2000 dot-com bubble was a proliferation of incompetent VCs chasing the glut of investment capital. Things seem roughly the same these days, or maybe even worse, since the eventual-rationality of the public markets can't come into play if there's no IPO.

pen2l 11y ago
The first VC who backed Theranos is a pretty smart guy. Was first in his class at Stanford, has an otherwise pretty nice portfolio of companies he has funded
- majani 11y ago
  First in a Stanford class can still turn out to be an incompetent VC who doesn't do due diligence
  - pen2l 11y ago
    The guy is still a winner though: https://en.wikipedia.org/wiki/Steve_Jurvetson https://en.wikipedia.org/wiki/Steve_Jurvetson He's made more good investments than bad at the end of the day.
- erobbins 11y ago
  My take on this is that theranos started out with good intentions, and just hasn't been able to make it happen so they are trying to buy time. The early stage investments were probably sound, but later rounds are a little questionable. Sometimes you have to know when to fail.

mrtron 11y ago

Which wireless over ultrasound scam? I haven't seen anything about that one.

OopsCriticality 11y ago
uBeam---the laws of physics are not favorable to their technology working as claimed.
- Florin_Andrei 11y ago
  It would work pretty well underwater.
  - meatysnapper 11y ago
    and that sort of technology has been used by the Navy since how long?