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Comment by erobbins | Hacker News Reader

Between this and the "wireless energy over ultrasound" scam I'm starting to wonder if VCs actually do any due diligence at all.

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I bet they pour over and nitpick lots of minor details on the financials

Tech? That's for the nerds. The light is blinking so it's fine I guess

> I bet they pour over and nitpick lots of minor details on the financials

What financials? Lots of these companies have little to no revenue.

Projections up and to the right.

"this graph looks like a hockey stick, how's $50 million?"

to be fair, their competition has well-known financials. The size of the existing market for blood tests is already large; any penetration would give you a sizable business.

"If this company obtains 1% of a $500 billion market, things will be great!" is not due diligence. Here, everything realistically comes down to the technology because the company's ability to gain and sustain market share is almost wholly dependent on it having a superior technology.

Some cliches never go out of style. I was at a startup in the mid 1980s and the words "hockey stick" came out of the CEO's mouth quite often.

Edit: BTW that mythical hockey stick quarter never did arrive.

The ones on the business plan

Not all VCs are equally (in)competent. I've always felt that one of the root causes of the ~2000 dot-com bubble was a proliferation of incompetent VCs chasing the glut of investment capital. Things seem roughly the same these days, or maybe even worse, since the eventual-rationality of the public markets can't come into play if there's no IPO.

The first VC who backed Theranos is a pretty smart guy. Was first in his class at Stanford, has an otherwise pretty nice portfolio of companies he has funded

First in a Stanford class can still turn out to be an incompetent VC who doesn't do due diligence

The guy is still a winner though: https://en.wikipedia.org/wiki/Steve_Jurvetson

He's made more good investments than bad at the end of the day.

My take on this is that theranos started out with good intentions, and just hasn't been able to make it happen so they are trying to buy time. The early stage investments were probably sound, but later rounds are a little questionable. Sometimes you have to know when to fail.

Which wireless over ultrasound scam? I haven't seen anything about that one.

uBeam---the laws of physics are not favorable to their technology working as claimed.

It would work pretty well underwater.

and that sort of technology has been used by the Navy since how long?

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