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In this case, it doesn’t sound like books were cooked. That would be motivated by falsifying past sales. In this case the future sales didn’t materialize. What
by omarhaneef 5y ago
In this case, it doesn’t sound like books were cooked. That would be motivated by falsifying past sales. In this case the future sales didn’t materialize.
What diligence would have saved you? You would have to learn enough about how blood tests work to conclude that it was not likely they had achieved it.
You could have passed on the investment unless they trusted you with the trade secret I suppose.
I’m not saying I have the right answer, but I am saying that it’s not as simple as checking the books.
- nradov 5y agoYou can learn yourself, or you can ask an expert. There were plenty of physiologists who could have told investors that it was simply impossible to assay accurate blood levels for most analytes based on a few drops of interstitial fluid. This was well known in the scientific community at the time.
- shrimpx 5y agoSorry. This blurb made me think cooked books: > Notably, the company told prospective investors in 2014 that the company was on track to break even and generate $100 million in revenue. It brought in little more than $100,000 for that period. Even if there was no cooking, how can they miss the mark by 1000x? How can VC be like “oh shit we were deceived. They said 100 million and it was 100 thousand.” It’s not rocket science to look at the operations of a company to determine if their claims are off by 1000x. Edit: spelling.