4 ms·

Huh. Another SV darling of the past 5 years ends up being a massive fraud. Sad there’s no real media in this country to cover these stories.

simulate-me 5y ago
This was covered by CNBC and WSJ. What media sources did you check?
- detaro 5y ago
  This really needs a "XYZ's law" label by now: If someone didn't see it, or doesn't remember seeing the reporting a year ago, or doesn't remember the headline accurately, it's the fault of the evil media not reporting things.
  - coolso 5y ago
    In fairness, the evil media is pretty picky and choosy on what it wants to make damn sure you know and think, and what it hopes you don’t know and think. Hence the term. Not sure it necessarily applies in this case though.
toomuchtodo 5y ago
Prescient comments from 3 years ago. https://news.ycombinator.com/item?id=18041106 https://news.ycombinator.com/item?id=18041106 “The grapevine says this place is a dog and pony show.” https://news.ycombinator.com/item?id=18042433 https://news.ycombinator.com/item?id=18042433 “Grapevine is true. What they are doing is extremely questionable. They are billing insurance thousands of dollars for tests that are rudimentary and only look at absence or presence of microbes.”
detaro 5y ago
Some of the media reports are literally linked from the Twitter thread here as sources.
anamax 5y ago
Theranos was not a "SV darling". Yes, Theranos was headquartered in SV, but, the vast majority of the investment money came from outside. (The only SV money was some very early stuff from Draper, which was a relatively small amount, and some later money from Larry Ellison.) Yes, George Schultz lives in SV, but he's not of SV.
- tptacek 5y ago
  Not so much? They raised from DFJ and ATA, not to mention Ellison. Definitely feels like an SFBA tech company to me.
  - anamax 5y ago
    The "D" in DFJ is Draper, which I mentioned. (DFJ has renamed itself to "Threshold.") I missed ATA. DFJ/Threshold did the seed round, $500k, but doesn't seem to have invested afterwards. ATA did B, at $9.1M, and was a minority investor in C, which totaled $28.5M; Ellison was the C lead and there was a third. In short, maximum for DFJ, ATA, and Ellison from those three rounds is <$40M. (Rupert Murdoch did A, $5.8M.) Theranos raised a total of $1.4B. $40M, aka <3%, is in the noise, and the fact that it was early not late says that SV wasn't interested. https://www.crunchbase.com/organization/theranos/company_financials https://www.crunchbase.com/organization/theranos/company_fin...
  - tomhoward 5y ago
    Yes and no. For the affirmative: Holmes was a Stanford student; the company was located in Palo Alto; she grew up idolizing Steve Jobs and thought she was emulating his approach; early investors were Tim Draper (personally or via DFJ? It’s not clear to me), Ellison and ATA. For the negative: Draper’s investment was a super-early, “family and friends” investment when the company was just a “promising idea”, kinda like a YC investment, and he didn’t invest again; Ellison isn’t a VC and was also just excited by the concept and the founder; other than Draper, none of the main SV VCs invested - i.e., Sequoia, KP, Bessemer, Graylock, Benchmark, Accel, General Catalyst, Index, etc, or even any smaller ones with any pedigree (ATA was a new firm in 2004 and is now defunct, and never had any repute); most of the funding, even quite early, and especially later, came from sources outside SV, eg Murdoch, politics figures, and other non-SV investment firms - you just wouldn’t raise funds from those kinds of sources if you were making it as a conventional Silicon Valley startup.

simulate-me 5y ago

This was covered by CNBC and WSJ. What media sources did you check?

detaro 5y ago
This really needs a "XYZ's law" label by now: If someone didn't see it, or doesn't remember seeing the reporting a year ago, or doesn't remember the headline accurately, it's the fault of the evil media not reporting things.
- coolso 5y ago
  In fairness, the evil media is pretty picky and choosy on what it wants to make damn sure you know and think, and what it hopes you don’t know and think. Hence the term. Not sure it necessarily applies in this case though.

toomuchtodo 5y ago

Prescient comments from 3 years ago. https://news.ycombinator.com/item?id=18041106 https://news.ycombinator.com/item?id=18041106 “The grapevine says this place is a dog and pony show.” https://news.ycombinator.com/item?id=18042433 https://news.ycombinator.com/item?id=18042433 “Grapevine is true. What they are doing is extremely questionable. They are billing insurance thousands of dollars for tests that are rudimentary and only look at absence or presence of microbes.”

detaro 5y ago

Some of the media reports are literally linked from the Twitter thread here as sources.

anamax 5y ago

Theranos was not a "SV darling". Yes, Theranos was headquartered in SV, but, the vast majority of the investment money came from outside. (The only SV money was some very early stuff from Draper, which was a relatively small amount, and some later money from Larry Ellison.) Yes, George Schultz lives in SV, but he's not of SV.

tptacek 5y ago
Not so much? They raised from DFJ and ATA, not to mention Ellison. Definitely feels like an SFBA tech company to me.
- anamax 5y ago
  The "D" in DFJ is Draper, which I mentioned. (DFJ has renamed itself to "Threshold.") I missed ATA. DFJ/Threshold did the seed round, $500k, but doesn't seem to have invested afterwards. ATA did B, at $9.1M, and was a minority investor in C, which totaled $28.5M; Ellison was the C lead and there was a third. In short, maximum for DFJ, ATA, and Ellison from those three rounds is <$40M. (Rupert Murdoch did A, $5.8M.) Theranos raised a total of $1.4B. $40M, aka <3%, is in the noise, and the fact that it was early not late says that SV wasn't interested. https://www.crunchbase.com/organization/theranos/company_financials https://www.crunchbase.com/organization/theranos/company_fin...
- tomhoward 5y ago
  Yes and no. For the affirmative: Holmes was a Stanford student; the company was located in Palo Alto; she grew up idolizing Steve Jobs and thought she was emulating his approach; early investors were Tim Draper (personally or via DFJ? It’s not clear to me), Ellison and ATA. For the negative: Draper’s investment was a super-early, “family and friends” investment when the company was just a “promising idea”, kinda like a YC investment, and he didn’t invest again; Ellison isn’t a VC and was also just excited by the concept and the founder; other than Draper, none of the main SV VCs invested - i.e., Sequoia, KP, Bessemer, Graylock, Benchmark, Accel, General Catalyst, Index, etc, or even any smaller ones with any pedigree (ATA was a new firm in 2004 and is now defunct, and never had any repute); most of the funding, even quite early, and especially later, came from sources outside SV, eg Murdoch, politics figures, and other non-SV investment firms - you just wouldn’t raise funds from those kinds of sources if you were making it as a conventional Silicon Valley startup.