8 ms·

I guess my main question here, is if they have been banned by the FDA from doing any testing at all for two years, what exactly is remaining of the business, an

• maxxxxx 10y ago
  I worked on a project where in the same building a startup was going under. It was totally clear that there was no hope but they kept burning through their VC money instead of closing.
  • ch4s3 10y ago
    Why not? Give your employees a life boat and some time to move on. I know some people who were at Ride well after it was clearly not going to work out. They all had breathing room to find good fits at new companies. Sure it burned a bunch of cash, but it lowered the human cost of the failure.
    • maxxxxx 10y ago
      That's a good point and a nice side effect but in general nobody gives a damn about the employees. This is most likely not the real reason.
      • jdmichal 10y ago
        The founders are employees too...
      • ch4s3 10y ago
        I think when the ship is sinking, even the captain(ceo) is trying to buy time to plan a next move.
      • mgraczyk 10y ago
        This is a pretty naive viewpoint. In many small startups, the founders and employees are close friends and have long personal histories, not to mention futures together. Founders are typically not stupid, and won't burn bridges just to role-play a capitalist caricature.
        • elastic_church 10y ago
          But Type-A would be fun, they said!
        • joatmon-snoo 10y ago
          I don't know if I would describe Elizabeth Holmes as your typical founder...
        • maxxxxx 10y ago
          At a company that size the founder and investors maybe care about the next one or two levels of management. The rest don't matter. They most likely don't even know people further down.
    • maverick_iceman 10y ago
      I'm pretty sure Elizabeth Holmes doesn't give a fuck about employee well-being.
  • rubiquity 10y ago
    I think that is fair. When a startup is successful a VC gets paid on 100% of their investment. When a startup is unsuccessful, why should VCs be allowed to cut bait and recoup the remaining investment? VCs get to have their cake and eat it too enough as it is already.
    • EpicEng 10y ago
      Because they funded the thing and took on far more risk than anyone else? I'd want my money back to; I'm not in the business of paying out white collar welfare.
      • Frondo 10y ago
        Nope, they took on less risk than anyone else involved. Money is fungible, and they've likely got a lot of it. The people there, day after day, they gave their time. That's something we all only have a limited amount of, and that's something you'll never get back.
        • EpicEng 10y ago
          That's insane. You seriously believe that you took on more risk by accepting a cushy, salaried position, than someone who invested millions of dollars? Their net worth is none of your business. They are quite literally funding every paycheck you get. No one is 'giving' their time; they're being paid for it. You're not doing anyone any favors. You're performing a task and getting compensated quite well to do so. Such an entitled perspective.
          • sbov 10y ago
            Most startups offer lower salaries and compensate in other ways. This is a risk. If you work at such a startup employees and founders likely take on more risk than your average VC because the VC can hedge their bets. Employees and founders have no way to do this. Edit: I wouldn't necessarily say each individual employee takes on more risk than the VC. But I would definitely say that, on the whole, they do. A startup that "almost makes it" can be a life & opportunity cost sucking endeavor for employees, VCs don't have to worry about that as much because they have their fingers in a lot of pies.
• bane 10y ago
  They don't really have any. It's likely that they're focusing their last bits of investor money back onto their hardware testing platforms, expecting to go back to market in two years and then ramp staffing back up as needed.
  • netik 10y ago
    I've worked at a couple startups where the company was more-than-done out of business and we spent our last 6-12 months negotiating with creditors and trying to get rid of hardware, software, and various worthless IP. But that takes a tiny skeleton crew, so maybe there's that. Or, perhaps you're right and they're going to see if they can wait out the 2 year ban. Most likely they will change the name of the company to hide the bad reputation and then re-release the hardware testing platforms.
• x0x0 10y ago
  1 - they think they will need more than 2 years to be in a stage where they run tests. And I'd bet they can test in the meantime, just not do human diagnostic tests, ie no treatment decisions based on the test. 2 - they will sell the lab devices and so won't do any testing themselves
• jforman 10y ago
  They were debarred by CMS, not FDA, since CMS regulates clinical labs (mostly). They can still theoretically sell medical devices that are cleared/approved by FDA.
• seehafer 10y ago
  They weren't banned by FDA, they were banned by CMS. And the ban was on conducting tests only. They're still allowed to develop test equipment to sell to other companies that will actually perform the tests. But the scrutiny they will get from FDA let alone any potential customer will be intense. No one in the diagnostics world will trust anything Holmes makes. Theranos is a dead company walking, provided Holmes remains in charge.