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Theranos isn't the best example. DFJ invested in their seed, but the vast majority of their funds were less sophisticated non-tech investors. Using them as a poster child for Silicon Valley dysfunction is a bit off to me.

Your broader point is well taken though, there are certainly cases where investors completely skip tech DD. Eg, Juicero's absolutely comical "engineering" that killed them with obscenely high costs.

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Theranos had a bunch of larger investors [1] many of them as sophisticated as any tech investor. I’m not saying SV investors are particularly dysfunctional, just that it’s pretty normal for tech DD to not get done, or get done badly. I use the Theranos example because it’s big and public (most disappear without any news).

[1] https://www.crunchbase.com/organization/theranos/investors/i...

While the high engineering costs are definitely comical, wasn't Juicero's failure because nobody wanted their revenue-driving product, the juice bags? Seems like a $600 device could still be profitable (and subsidized) if the core revenue driver was viable.

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