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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
by 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 agoThe 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.
- 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.
- lupire 4y agoShe lived in China at the time. She said she "distributed" compilers, as in "sold pirated copies of MSVC++ to noobs".