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None of the top VC firms were invested in Theranos. Was this intentional on Theranos’ founders part? Were they evaluated by top VCs and found lacking?
by jeremynixon 10y ago
None of the top VC firms were invested in Theranos. Was this intentional on Theranos’ founders part? Were they evaluated by top VCs and found lacking?
- acchow 10y agoDo the top VCs really play in biotech?
- akiselev 10y agoBiotech/medical venture capital is a completely different and only slightly smaller industry than software VC but yes the top late stage firms, like Sequoia Capital, generally invest in both. It's hard to find companies to invest tens or hundreds of millions of dollars into (each) and biotech companies can easily require that much in an industry with proven exit strategies (and greater annualized returns than software according to some studies). Since pharma largely outsources R&D to the startup world, there are many exit paths including technology or talent acquisition (people, techniques, and equipment), patent acquisition (before and after approval), and even pre-revenue IPOs which are surprisingly common in the life sciences to this day.
- cloudjacker 10y agoGetting funded by VCs doesn't mean what you think it means. It isn't validation or lack thereof, it is perceived portfolio fit plain and simple.
- bosdev 10y agoThis is just not true. When a VC invests, they are betting this company will aggressively grow in value. All do some amount of due diligence. Clearly in some cases, not enough.
- cloudjacker 10y agoYou are basically implying that if someone does due diligence and decides not to invest, that the company is invalid. Its okay, that is a common sentiment. Incorrect though
- iaw 10y agoYou're 100% correct. Source: VC friends and the VC's I've pitched.
- adevine 10y agoYes, top VCs did pass. There was a good article about how Google Ventures was initially interested but passed when they didn't see any evidence of functioning product.