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How those situations are possible? Why investors are not making any kind of due diligence and background check on the founders and on the technology? I was s

How those situations are possible? Why investors are not making any kind of due diligence and background check on the founders and on the technology? I was scrutinized in deep before being hired by my company, but it seems that people are raising millions just grabbing miracle without any kind of verifications. Why the system is so vulnerable to con men and snake oil sellers?

throw_m239339 4y ago
> How those situations are possible? Why investors are not making any kind of due diligence and background check on the founders and on the technology? Not only some people within the company questioned the magician's credentials but were fired for doing so and these people were subsequently harassed by the company itself to make them keep their mouth shut, in order to protect the "reputation" of the scammer. To me it seems like some higher ups were complicit... > Enochian’s former CFO is currently embroiled in an undisclosed lawsuit with Enochian’s leadership, claiming he was fired for asking “critical questions” about “serious financial improprieties” and large payments to Gumrukcu, and for questioning the company’s close association with an individual accused of numerous felonies. So many redflags...
- lormayna 4y ago
  > So many redflags... Redflags start with the history of the founder. If the VC asks about a PhD proof, the credibility of the founder will be destroyed. The funny things is that those scanners (as sociopathic narcissistic) know very well how to hide that with foggy and not verificable experiences. Sometimes I am thinking to found a startup that can verify the con men bullshit as a service
- itsoktocry 4y ago
  >So many redflags... Investors literally don't care about red flags: https://www.vox.com/recode/23142106/adam-neumann-crypto-carbon-credit-offset-flowcarbon https://www.vox.com/recode/23142106/adam-neumann-crypto-carb...
  - lupire 4y ago
    Investors LOVE red flags. It shows a healthy can-do attitude that won't be blocked by laws or ethics.
soco 4y ago
Because the system is tuned to look for quick profits. Are they losing from time to time to cone men? Yes they do, but that's business risk.
- lormayna 4y ago
  I understand that is business risk, but con men are easy to spot on. Think about Theranos or Nikola: the histories of the founders were completely fake (who can believe that Elisabeth Holmes sold C++ compilers to Chinese universities when she was teen ager?) and their technologies were simply "too good to be true". With just a bit of good sense, the VC can save lot of money, this is what I don't understand. Otherwise it's just like gambling at roulette.
  - simiones 4y ago
    The thing is, lots of Ponzi schemes make money for early investors who walk out at the right time. Not sure if this happened for Theranos or Nikola, but it definitely happened for Madoff's scam: some big players were pretty sure that it was a scam, but they saw it growing and invested in it, withdrew at the right time, and left with plenty of perfectly legal gains. Basically, investing in scams can be a great way to profit off the scam without incurring the legal costs when it's discovered. Of course, you still have to be careful not to be left holding the bag, but that's a common risk with other investments as well.
    - coolspot 4y ago
      Sounds like history of whole crypto industry.
    - ncmncm 4y ago
      Those gains, anyway, got clawed back.
  - itsoktocry 4y ago
    >Think about Theranos or Nikola Do a search on HackerNews for early articles on Theranos. I can recall a lot of accusations of "sexism" being thrown around if anyone questioned the narrative of Holmes' technical pedigree. >With just a bit of good sense, the VC can save lot of money Or they can get on board the Ponzi and just make sure they get out in time, and make billions.

throw_m239339 4y ago

> How those situations are possible? Why investors are not making any kind of due diligence and background check on the founders and on the technology? Not only some people within the company questioned the magician's credentials but were fired for doing so and these people were subsequently harassed by the company itself to make them keep their mouth shut, in order to protect the "reputation" of the scammer. To me it seems like some higher ups were complicit... > Enochian’s former CFO is currently embroiled in an undisclosed lawsuit with Enochian’s leadership, claiming he was fired for asking “critical questions” about “serious financial improprieties” and large payments to Gumrukcu, and for questioning the company’s close association with an individual accused of numerous felonies. So many redflags...

lormayna 4y ago
> So many redflags... Redflags start with the history of the founder. If the VC asks about a PhD proof, the credibility of the founder will be destroyed. The funny things is that those scanners (as sociopathic narcissistic) know very well how to hide that with foggy and not verificable experiences. Sometimes I am thinking to found a startup that can verify the con men bullshit as a service
itsoktocry 4y ago
>So many redflags... Investors literally don't care about red flags: https://www.vox.com/recode/23142106/adam-neumann-crypto-carbon-credit-offset-flowcarbon https://www.vox.com/recode/23142106/adam-neumann-crypto-carb...
- lupire 4y ago
  Investors LOVE red flags. It shows a healthy can-do attitude that won't be blocked by laws or ethics.

soco 4y ago

Because the system is tuned to look for quick profits. Are they losing from time to time to cone men? Yes they do, but that's business risk.

lormayna 4y ago
I understand that is business risk, but con men are easy to spot on. Think about Theranos or Nikola: the histories of the founders were completely fake (who can believe that Elisabeth Holmes sold C++ compilers to Chinese universities when she was teen ager?) and their technologies were simply "too good to be true". With just a bit of good sense, the VC can save lot of money, this is what I don't understand. Otherwise it's just like gambling at roulette.
- simiones 4y ago
  The thing is, lots of Ponzi schemes make money for early investors who walk out at the right time. Not sure if this happened for Theranos or Nikola, but it definitely happened for Madoff's scam: some big players were pretty sure that it was a scam, but they saw it growing and invested in it, withdrew at the right time, and left with plenty of perfectly legal gains. Basically, investing in scams can be a great way to profit off the scam without incurring the legal costs when it's discovered. Of course, you still have to be careful not to be left holding the bag, but that's a common risk with other investments as well.
  - coolspot 4y ago
    Sounds like history of whole crypto industry.
  - ncmncm 4y ago
    Those gains, anyway, got clawed back.
- itsoktocry 4y ago
  >Think about Theranos or Nikola Do a search on HackerNews for early articles on Theranos. I can recall a lot of accusations of "sexism" being thrown around if anyone questioned the narrative of Holmes' technical pedigree. >With just a bit of good sense, the VC can save lot of money Or they can get on board the Ponzi and just make sure they get out in time, and make billions.