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Man how insane is it that these guys and gals raised 400 millions on tech without any raw data, nothing to show for it? It was never reproduced? They just said
by dmbche 3y ago
Man how insane is it that these guys and gals raised 400 millions on tech without any raw data, nothing to show for it? It was never reproduced? They just said they got it?
- asylteltine 3y agoWhatever VCs invested in it deserve to lose their money. Theranos was a learning opportunity
- gostsamo 3y agoNot sure why you were flagged, but many people handling millions say that they can do it because they know how to do it. There is a case to be made that some of them actually don't.
- masswerk 3y agoAlso, a certain corrective factor is required to make the "because" in this argument work.
- malfist 3y agoI don't agree. A conman's mark may be foolish, but it is not their fault they were conned and they don't deserve to be punished. The conman does.
- 11101010001100 3y agoYou ask to see the data and agree to sign an NDA. If the company does not agree to this, then you walk. IF the company agrees, but then shows fraudulent data, then you are fucked.
- deleted 3y ago[deleted]
- pessimizer 3y agoVCs aren't marks. They're fencers, hoping to get rid of the product before anyone realizes it's worthless or stolen. The (possibly sometimes subconscious) reason they don't care to deeply investigate is because if they're convinced by a shallow inspection, they're pretty sure they'll be able to convince others. It's a greater fool shockwave, pretending to buy into something and betting that you can get someone else to buy into it before the bottom falls out. Not that you know for sure the bottom will fall out, but if you're going to buy in based on how marketable the pitch is, examining it too hard might weaken that pitch or make it fall apart. In that case you've wasted time and money and have to find something else. If you're committed, the last thing you want to do is examine the business; you're shortening your bullshit runway.
- The_Blade 3y agoI like the take of Joseph "Yellow Kid" Weil as well as the guy who sold the Eiffel Tower... twice to conflate movie quotes, a fool and his money were lucky enough to get together in the first place, and we just can't help ourselves
- 8note 3y agoProfessional investors owe a duty to due diligence to whoever they're investing for. Theranos was unreasonable on the face of it. VCs were among the conmen, rather than the marks
- notatoad 3y agowe really need to stop talking about these situations with legitimate terminology. They aren't "VCs" or "Investors". They're marks, and they got scammed. "you can't cheat an honest man" definitely applies.
- hef19898 3y agoI know of a company, in a totally different field, operating on the same principles, with the same warning signs. They raised close to one billion and are in the process of raising 200 million more. Happens all the time, but never to me (quoting a line from the classic Margin Call).
- CoastalCoder 3y agoI'm pretty naive about investing, but IIUC there are ways to bet against the stock price of a publicly traded company. Is there a mechanism for betting against a pre-IPO company?
- Scoundreller 3y agoYes, but not as easily. Just need to be accredited and find someone willing to take the other end of the trade, as with anything else.
- hef19898 3y agoOh, that one is post-SPAC...
- anonymouskimmer 3y agoInvest in its publicly traded competitors.
- feoren 3y agoThat sounds a little bit like "If I can tell this company is defrauding investors, how can I get in on the fraud?" Whoever you borrow that stock from is now your mark that you are defrauding -- indirectly, of course, since you're not forging fake results or something. It still feels icky.
- CoastalCoder 3y ago> That sounds a little bit like "If I can tell this company is defrauding investors, how can I get in on the fraud?" That's not how I meant it. I was thinking more generally about pre-IPO companies that you think (for reasons that you can legitimately use when investing in this manner) have dim prospects.
- ryandrake 3y agoThe more I live in this world, the more I realize that its winners are pretty much exclusively charismatic bullshitters. I used to think that professional investors actually were a little smarter than the rest. I mean, here they are making huge bets on particular numbers on the roulette wheel--they must know something we don't! But they keep getting fooled! They have gobs and gobs of money to invest. Rich people chasing ever riskier rewards just handing money to them! They have to find something promising to throw it at. But who is it going to? Evidently, a lot of it goes to founders whose primary skill is storytelling. I used to think, no matter how handsome and smooth and persuasive you are, you at least have to have a little substance behind your enchanting narrative and ivy-league mannerisms. But here we are with failure after failure (and a once-a-decade colossal failure like Theranos) where all the warning signs were visible to someone not under the spell, and these bullshitters are still getting funding shoveled at them. It's pretty sad that "look like you know what you are doing and convince gullible people" is probably the best future career advice I can give to my school-age daughter.
- JohnFen 3y ago> I used to think that professional investors actually were a little smarter than the rest. It's been my experience that you can't tell who's smarter than who by what they do for a living. On the whole, no group is actually smarter than any other group. > It's pretty sad that "look like you know what you are doing and convince gullible people" is probably the best future career advice I can give to my school-age daughter. I don't agree with that takeaway. I think the takeaway is that confidence is the primary thing that people take as a proxy for competence. It's not really about gullibility as much as people engaging in a heuristic. So learn to fake confidence, but have the chops to back it up.
- kriro 3y agoI'd venture that professional concert piano players or chess professionals (just to pick two random ones that popped into my head) are on average more intelligent than other fields which I won't name. I suppose it depends on the definition of smart which I understand as intelligent/good rational decision making but maybe you mean somthing else.
- Aerbil313 3y ago> how insane is it that these guys and gals raised 400 millions on tech without any raw data, nothing to show for it? Abolish Venture Capital.
- bonadrag 3y agoLook at the stock market and fixed income investments around you. There is nothing there, very modest growth. That explains in part why so many people shifted part of their pile of cash to VC investments. The pile is not growing fast enough. Too many suckers out there who have not realized that we are in a new normal: low growth, low productivity, an aging, less dynamic society.
- andrepd 3y agoRemember: capitalism is the best system for allocating resources.
- wnevets 3y ago> Man how insane is it that these guys and gals raised 400 millions on tech without any raw data, nothing to show for it? It was never reproduced? They just said they got it? Got to stop thinking that people with money are smarter than anyone else.