Theranos didn’t work with the huge drug company it supposedly made money from

I edited the parent post for clarity.

There's a decent discussion on this here[1]. Red flags, like reports of late-stage investors marking down the value of some of their unicorn investments, are starting to mount and I think that has to be worrisome for investors who are sitting on large unrealized gains that could easily evaporate.

Expect to see a lot more hand-waving on the part of investors as prominent unicorns come apart at the seams.

Morin, according to his AngelList profile, is an investor in a number of unicorns, including AirBnB, Dropbox, Evernote and Slack. Two of the mutual funds that invested in Dropbox have reportedly marked down their investments[2] and some media reports suggest Evernote is in trouble[3].

[1] https://pando.com/2015/10/27/techpocalypse-coming/

[2] https://www.theinformation.com/mutual-funds-mark-down-dropbo...

[3] http://www.businessinsider.com/evernote-is-in-deep-trouble-2...

Edit: Some examples: https://news.ycombinator.com/item?id=8182026

edit: Apparently I wasn't clear. Enron's board was also stacked with high-ranking politicians and many executives still saw jail time.

My point was that a well-connected board won't necessarily shield executives from prosecution.

Pardon my whining about how getting funding works for a good majority of start-uppers. Like how many Ivy Leaguers has YC funded? Is it a majority or minority amount?

I'd love to find a true startup partner who has connections and is vested the same as I. One who will and drop everything to help me take advantage of all this opportunity.

My favorite uncle is my father's cousins husband. His brother was the CEO of large well know retail store.

The tl;dr is that Theranos makes their own machines, which makes every test that they perform technically a "Lab Developed Test" LDT which doesn't have the same oversight that machines which are sold to others. As long as they make their machines and use their machines, they're effectively exploiting a loophole.

From the article:

The backdrop for this dispute is an unusual regulatory structure that does, in fact, confer upon some–though not all–conventional lab tests an extra layer of validation that Theranos’s do not yet have. Most labs, like Quest and Laboratory Corp. of America, perform many of their routine tests using analyzers they buy from medical-device manufacturers, like Siemens, Olympus, and Beckman Coulter. Before those manufacturers can sell such equipment, they must obtain U.S. Food and Drug Administration approval for the tests those analyzers perform–a process that is in addition to, and more searching than, the audits and proficiency tests required to win CMS certification for the lab itself.

At the same time, for other procedures conventional labs will devise their own lab-developed tests, or LDTs, which they do not have cleared by the FDA. While the FDA takes the position that it could require approval for LDTs, for many years it has said it would forgo that right in the exercise of its “enforcement discretion.”

Theranos, which does not buy any analyzers from third parties, is therefore in a unique position. While it would need FDA approval to sell its own analyzers to other labs, it doesn’t do that. It uses its analyzers only in its own CMS-certified lab. All its tests are therefore LDTs, effectively exempt from FDA oversight.