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When it comes to medical devices, Draper's dumb money. The only reason he invested is because of good ol' nepotism: > Draper, the venture capitalist and early

When it comes to medical devices, Draper's dumb money. The only reason he invested is because of good ol' nepotism: > Draper, the venture capitalist and early Theranos investor, says he’s known Holmes since she was 6 years old and a friend of his daughter. When she decided to start her company, she approached him. He called her parents to make sure they were OK with her plan to drop out of school. Then he gave her $1 million.

alanh 11y ago
> He called her parents to make sure they were OK with her plan to drop out of school. Then he gave her $1 million. Wow, that’s a heck of a narrative. I would never criticize Ms. Holmes for using her connections like this, but when stated as above, this investment sounds like a total freebie. And we all know that, thanks to investor herd mentality, one investment is a springboard to less skeptical follow-on investment. In this case, the first investors don't sound skeptical at all, because they viewed this as a family-friend favor more than an actual business decision. If Theranos were perceived a hell of an opportunity, do you think he’d give a rat’s ass if her parents would rather she finish her degree? Can you imagine an investor calling Zuck’s parents — hey is it OK if your son continues this facebook thing, or should I encourage him to go back to school?
- SilasX 11y ago
  Don't investors generally care if a very key, single-point-of-failure person is in a position where they will receive a lot of resistance from family members to doing necessary tasks? Edit: For example, if some really competent, unfunded entrepreneur had some brilliant idea to revolutionize liquor distribution, but their family were conservative Baptists (or Muslims, or Mormons, etc), wouldn't you want some kind of reassurance that won't be a problem before you invest?
- magicalist 11y ago
  > If Theranos were perceived a hell of an opportunity, do you think he’d give a rat’s ass if her parents would rather she finish her degree? Can you imagine an investor calling Zuck’s parents — hey is it OK if your son continues this facebook thing, or should I encourage him to go back to school? If the investor was a family friend, uh, absolutely. It's a person with an idea, a prototype on a tiny scale, and no funding. The people that fit that description are a dime a dozen, and the vast, vast majority will get nowhere or fail, no matter how good the idea. You're friends with their parents. Checking with them before giving the kid the means to drop out of college is not remotely ridiculous.
- rmason 11y ago
  Actually know an entrepreneur who was friends with Matt Mullenweeg's parents. They wanted him to talk with their son to convince him to not drop out of college. He told me he met Matt, was very impressed with WordPress and told his parents that what he was doing was OK.
steve19 11y ago
Or was the whole point of his puzzled naive persona to make the point "we could be selling these, but because we take this safety thing so seriously we are not". Most of HN, and all of Wall Street, knows they are not using their own tests. I doubt this investor is unaware.
gohrt 11y ago
Whoa, such a meritocracy, where all it takes to make it big is to have rich parents and rich friends, and an big idea (good/correct idea optional)

alanh 11y ago

> He called her parents to make sure they were OK with her plan to drop out of school. Then he gave her $1 million. Wow, that’s a heck of a narrative. I would never criticize Ms. Holmes for using her connections like this, but when stated as above, this investment sounds like a total freebie. And we all know that, thanks to investor herd mentality, one investment is a springboard to less skeptical follow-on investment. In this case, the first investors don't sound skeptical at all, because they viewed this as a family-friend favor more than an actual business decision. If Theranos were perceived a hell of an opportunity, do you think he’d give a rat’s ass if her parents would rather she finish her degree? Can you imagine an investor calling Zuck’s parents — hey is it OK if your son continues this facebook thing, or should I encourage him to go back to school?

SilasX 11y ago
Don't investors generally care if a very key, single-point-of-failure person is in a position where they will receive a lot of resistance from family members to doing necessary tasks? Edit: For example, if some really competent, unfunded entrepreneur had some brilliant idea to revolutionize liquor distribution, but their family were conservative Baptists (or Muslims, or Mormons, etc), wouldn't you want some kind of reassurance that won't be a problem before you invest?
magicalist 11y ago
> If Theranos were perceived a hell of an opportunity, do you think he’d give a rat’s ass if her parents would rather she finish her degree? Can you imagine an investor calling Zuck’s parents — hey is it OK if your son continues this facebook thing, or should I encourage him to go back to school? If the investor was a family friend, uh, absolutely. It's a person with an idea, a prototype on a tiny scale, and no funding. The people that fit that description are a dime a dozen, and the vast, vast majority will get nowhere or fail, no matter how good the idea. You're friends with their parents. Checking with them before giving the kid the means to drop out of college is not remotely ridiculous.
rmason 11y ago
Actually know an entrepreneur who was friends with Matt Mullenweeg's parents. They wanted him to talk with their son to convince him to not drop out of college. He told me he met Matt, was very impressed with WordPress and told his parents that what he was doing was OK.

steve19 11y ago

Or was the whole point of his puzzled naive persona to make the point "we could be selling these, but because we take this safety thing so seriously we are not". Most of HN, and all of Wall Street, knows they are not using their own tests. I doubt this investor is unaware.

gohrt 11y ago

Whoa, such a meritocracy, where all it takes to make it big is to have rich parents and rich friends, and an big idea (good/correct idea optional)