Theranos Founder Elizabeth Holmes Criminal Fraud Charge Update

Brainster said:
Guilty on four counts, acquitted on four, hung on three.
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From the link:
Holmes was found guilty on one count of conspiracy to commit wire fraud against Theranos investors and three other counts of wire fraud against investors. She was acquitted on all four counts of wire fraud against patients. The jury deadlocked on three counts of fraud against investors.
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The charges were so closely related, it's hard to understand how the jury wouldn't go all in one way or the other. I might have thought that the fraud against patients would be easier to prove: she couldn't test their blood as she claimed she could. There might be a little more gray area about what she promised investors.
 
I never wanted to see Holmes guillotined or anything. I think she scammed because she had psychological issues, so I do feel pity. What a thing, though. She really did ride the rocket to ruin.
 
eerok said:
I never wanted to see Holmes guillotined or anything. I think she scammed because she had psychological issues, so I do feel pity. What a thing, though. She really did ride the rocket to ruin.
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You could say that about almost any criminal, or really anybody who displays extreme misconduct. That's no excuse for perpetrating a massive, multiyear, multibillion-dollar fraud, especially in the health care field. Lock her up for a long time.
 
Bob001 said:
You could say that about almost any criminal, or really anybody who displays extreme misconduct. That's no excuse for perpetrating a massive, multiyear, multibillion-dollar fraud, especially in the health care field. Lock her up for a long time.
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No, it's no excuse, but I think she was scamming herself along with everyone else.
 
eerok said:
I never wanted to see Holmes guillotined or anything. I think she scammed because she had psychological issues, so I do feel pity. What a thing, though. She really did ride the rocket to ruin.
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Psychopathic murderers have "psychological issues" too.
 
eerok said:
No, it's no excuse, but I think she was scamming herself along with everyone else.
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No she wasn't. She is a member of the comfortable class, as such she expects or rather knows that the world is as she wishes it to be she simply did not have the knowledge base nor intelligence (which can make up to a degree for a lack of specific knowledge) to understand the world doesn't work as she was taught and experienced from the cradle that it did.
 
I'm a bit disappointed that she was not found guilty of defrauding patients. She's being held to account for defrauding the super-rich who were making risky investments in a start-up.
 
Darat said:
No she wasn't. She is a member of the comfortable class, as such she expects or rather knows that the world is as she wishes it to be she simply did not have the knowledge base nor intelligence (which can make up to a degree for a lack of specific knowledge) to understand the world doesn't work as she was taught and experienced from the cradle that it did.
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No longer comfortable though.
She is the exception that proves the rule.
 
Craig4 said:
I'm a bit disappointed that she was not found guilty of defrauding patients. She's being held to account for defrauding the super-rich who were making risky investments in a start-up.
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If there's one thing our courts exist to do, it's to punish people who rip off rich idiots.

Punishing people for endangering patients with a scam medical device is not really something the law does very well.

ETA: Setting 100 million of the DeVos fortune on fire should be counted as community service and result in time taken off her sentence. Critical support for Holmes making some of the dumbest rich people in this country slightly less rich.
 
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SuburbanTurkey said:
If there's one thing our courts exist to do, it's to punish people who rip off rich idiots.

Punishing people for endangering patients with a scam medical device is not really something the law does very well.
.....
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Well, prosecutors charged her with injuring patients. That's all they can do. I'm not sure I understand the jury's logic, unless it's that she communicated directly with investors to get their money, but she never told patients directly that she could deliver magic results. The patients also relied on Walgreens, their doctors, etc. Responsibility could be seen as more diffuse.
 
I’m disappointed that the jury did not find her guilty of defrauding patients. Her lies about the capabilities of their machines are directly responsible for putting patients at risk. I know that a few years back, a bunch of patients sued Walgreens and Theranos but I don’t see any updates as to how that came out. I’ll bet it was a paltry settlement without admitting wrongdoing.

I can see, as Bob001 said, that there is a lot of responsibility to go around. Walgreens definitely shares responsibility for not properly vetting the science before offering it to patients. I just don’t see how that lets Holmes off the hook for her responsibility.

I think the jury had an opportunity to make a statement against companies and people who perpetrate fraud in the medical industry. While I understand that isn’t necessarily their job, I just don’t see how they could find her guilty of defrauding investors but not of defrauding patients.
 
xjx388 said:
I’m disappointed that the jury did not find her guilty of defrauding patients. Her lies about the capabilities of their machines are directly responsible for putting patients at risk. I know that a few years back, a bunch of patients sued Walgreens and Theranos but I don’t see any updates as to how that came out. I’ll bet it was a paltry settlement without admitting wrongdoing.

I can see, as Bob001 said, that there is a lot of responsibility to go around. Walgreens definitely shares responsibility for not properly vetting the science before offering it to patients. I just don’t see how that lets Holmes off the hook for her responsibility.

I think the jury had an opportunity to make a statement against companies and people who perpetrate fraud in the medical industry. While I understand that isn’t necessarily their job, I just don’t see how they could find her guilty of defrauding investors but not of defrauding patients.
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Because the patients weren't materially disadvantaged. The patients were receiving accurate results - it's just that Theranos wasn't conducting the tests itself using its proprietary technology, but rather it was sending the bloods out to proper labs for analysis with equipment that actually worked as required.

On the other hand, investors were materially disadvantaged. They were persuaded to invest (some very heavily) in a company which promised them it had designed a revolutionary new machine/process for testing blood. The investors gave Theranos lots of money on that basis, with the implied expectation that this revolutionary technology a) would make Theranos a very important player in the global medical diagnostics industry extremely quickly, and b) would make a profitable return for those investors, similarly quickly.

Had Holmes told the truth to potential investors, there would have been way less chance that they'd have invested - and the implied valuations upon which any investments were made would have been way lower. Holmes and Theranos effectively conspired to defraud investors.

I can therefore see perfectly well why the Holmes convictions/acquittals fell where they did.
 
LondonJohn said:
Because the patients weren't materially disadvantaged. The patients were receiving accurate results
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Not always. At least two patients testified about how they were affected by false results from Theranos.
https://www.cnbc.com/2021/09/21/the...-miscarriage-diagnosis-witness-testifies.html
https://www.cnbc.com/2021/11/17/the...st-came-back-with-false-positive-for-hiv.html

And some observers felt that the prosecution didn't give the patients' cases nearly the attention and support they deserved.
https://www.wsj.com/articles/in-elizabeth-holmes-trial-u-s-gave-patients-a-small-stage-11641329202
 
We're there no inaccurate results provided?
Honest q, I'm not up on the office/lab shenanigans that went on.
Someone upthread mentioned an erroneous preg result. True? Anomaly?

Cute... within the minute of Bob. Thanks bob [emoji1]

Also... unlike Elon, she took no monetary payout before the crash. She'll skate on certain charges there where he may still be hosed down the road ( yes, he's a successful grifter, but...).
 
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LondonJohn said:
Because the patients weren't materially disadvantaged. The patients were receiving accurate results - it's just that Theranos wasn't conducting the tests itself using its proprietary technology, but rather it was sending the bloods out to proper labs for analysis with equipment that actually worked as required.

On the other hand, investors were materially disadvantaged. They were persuaded to invest (some very heavily) in a company which promised them it had designed a revolutionary new machine/process for testing blood. The investors gave Theranos lots of money on that basis, with the implied expectation that this revolutionary technology a) would make Theranos a very important player in the global medical diagnostics industry extremely quickly, and b) would make a profitable return for those investors, similarly quickly.

Had Holmes told the truth to potential investors, there would have been way less chance that they'd have invested - and the implied valuations upon which any investments were made would have been way lower. Holmes and Theranos effectively conspired to defraud investors.

I can therefore see perfectly well why the Holmes convictions/acquittals fell where they did.
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You are correct in that most tests were being run on regular commercial lab machines; however, those machines were modified in ways they were not designed for in order to be able to run tests on small amounts of blood. By so modifying them, they were operating their lab outside the standards set by CLIA and the FDA approvals for those machines. They did do a lot of testing on regular blood draws on unmodified machines; but a large chunk of the testing was on modified machines outside standard operating procedure for those machines.

And their lab was a mess. They couldn’t pass CLIA inspections and that was a big reason they had to shut down the lab which was a step on the way to the downfall of the company.

They had to invalidate all test results from the Walgreens/Theranos sites. Millions of tests. It’s impossible to say which results were accurate or not and doctors made medical decisions based on those results. Many patients had adverse reactions. They were told they had weird autoimmune disorders that they later found out wasn’t true.

Here’s a WSJ article detailing the mess they made of patient care as it happened: https://www.wsj.com/articles/the-patients-hurt-by-theranos-1476973026

Holmes knew all of that was happening. She insisted they open Walgreens labs when she knew they weren’t ready to serve patients. It’s just unthinkable that something like that even happened.
 
xjx388 said:
You are correct in that most tests were being run on regular commercial lab machines; however, those machines were modified in ways they were not designed for in order to be able to run tests on small amounts of blood. By so modifying them, they were operating their lab outside the standards set by CLIA and the FDA approvals for those machines. They did do a lot of testing on regular blood draws on unmodified machines; but a large chunk of the testing was on modified machines outside standard operating procedure for those machines.

And their lab was a mess. They couldn’t pass CLIA inspections and that was a big reason they had to shut down the lab which was a step on the way to the downfall of the company.

They had to invalidate all test results from the Walgreens/Theranos sites. Millions of tests. It’s impossible to say which results were accurate or not and doctors made medical decisions based on those results. Many patients had adverse reactions. They were told they had weird autoimmune disorders that they later found out wasn’t true.

Here’s a WSJ article detailing the mess they made of patient care as it happened: https://www.wsj.com/articles/the-patients-hurt-by-theranos-1476973026

Holmes knew all of that was happening. She insisted they open Walgreens labs when she knew they weren’t ready to serve patients. It’s just unthinkable that something like that even happened.
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Oh I totally agree that it was unthinkable. And yes, they were often running commercial machines outside their design parameters. Plus they actually were making up results for certain tests (eg syphilis).

However, since most of the Walgreens patients/customers were getting a regular venous sample being drawn (as opposed to the fingerprick capillary draw that Theranos boasted was all that was required), there was usually enough of one person's blood to run reliable tests for a range of diseases/abnormalities/etc. So by and large, patients/customers were getting reliable results, but they were being lied to about how those results were generated.

The courts found - correctly, in my view - that no fraud was being perpetrated on these customers: they were paying for certain tests, giving blood for the purpose of having these tests, and being given the results of those tests. The fact that they thought the near-miracle Edison machine was being used to conduct the tests and generate the results, whereas in reality it was standard commercially-available machines being used by Theranos, really was not materially important vis-a-vis what they were paying for and what they received for that payment.

On the other hand, investors - especially incoming investors - were, beyond a shadow of a doubt, being defrauded by Theranos's lies regarding the efficacy of the Edison machine and the general state of health of the company. They were putting money into a lie.
 
SuburbanTurkey said:
Against who? Theranos is broke and Holmes is going to jail.
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You can sue anybody for anything. I could imagine some investors suing others for promoting or misrepresenting Theranos. I could imagine patients suing Walgreens, if they're not already, for misrepresenting the testing services. I could imagine investors suing media outlets that fawned over Holmes so shamelessly. I could certainly imagine everybody suing Holmes and other senior executives for anything they have or might get in the future (and I find it had to believe that Holmes hasn't stashed assets somewhere). Doesn't mean suits will be successful, but that doesn't keep them from being filed.

Fun fact: Maybe everybody else knew this, but I was surprised to just learn that Holmes' daddy had been a senior executive at Enron before its collapse. Maybe Holmes developed her skills around the dinner table.
 
Bob001 said:
Fun fact: Maybe everybody else knew this, but I was surprised to just learn that Holmes' daddy had been a senior executive at Enron before its collapse. Maybe Holmes developed her skills around the dinner table.
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Maybe. But Enron had multiple divisions, covering many unrelated areas of business. Their pipeline infrastructure business wasn't necessarily the same environment as their electricity-trading business. My understanding is that some senior executives were definitely in the loop on the electricity market shenanigans, but others weren't involved in that side of the company at all.
 
theprestige said:
Maybe. But Enron had multiple divisions, covering many unrelated areas of business. Their pipeline infrastructure business wasn't necessarily the same environment as their electricity-trading business. My understanding is that some senior executives were definitely in the loop on the electricity market shenanigans, but others weren't involved in that side of the company at all.
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Sure. He was never charged with anything, and he went on to other responsible jobs. However, according to an official biography,
....He also served as Vice President for Tenneco Energy and Vice President of Enron, responsible for due diligence on potential investments in the environmental and energy sectors.
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https://heavy.com/news/2019/03/elizabeth-holme-parents-noel-christian/

It doesn't sound like he was a paperpusher either.

And apparently both of Holmes' parents played an aggressive role in promoting her, even from childhood.
https://www.forbes.com/sites/peterc...s-known-here-since-childhood/?sh=5b28ade9366b
 
Bob001 said:
Sure. He was never charged with anything, and he went on to other responsible jobs. However, according to an official biography,

https://heavy.com/news/2019/03/elizabeth-holme-parents-noel-christian/

It doesn't sound like he was a paperpusher either.
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What does not being a paperpusher have to do with it?

So he was responsible for due diligence on potential investments. That sounds completely unrelated to the electricity trading business and the scandalous and fraudulent activities in that part of the company. I dunno, maybe he researched an Oregon power company prior to Enron buying it, and somehow we're supposed to parlay that into the supposition that he is somehow implicated in the bad behavior that went on in other parts of the company?

Not everyone at Enron was a bad actor. Some were ignorant of the goings-on. Some were uninvolved in the areas of the business that harbored the bad actors. Some were actually trying to oppose the bad acts. I get that Elizabeth Holmes is a bad person and we're supposed to have bad feelings about her. And I get that we're supposed to suspect her parents of being bad people and have bad feelings about them, too. But this Enron connection seems gratuitously tangential to anything actually relevant to the topic of this thread.
 
Bob001 said:
You didn't read the link, did you?
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I read it. I don't think the Forbes writer's interpretation of Fuiz's remarks is reliable enough to factor into my view of the case. There's enough credible stuff on the record to justify not liking Holmes and Theranos, without these serial attempts to over-egg the pudding.

Her dad worked at Enron? So what? She worked at Theranos.
 
dudalb said:
Her dad worked at Enron?
The apple don;t fall far from the tree, as the saying goes.
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There's a lot more to Enron than just their electricity trading business. There were a lot of people who worked there and weren't involved in that and didn't know what was going on there. If her dad were Ken Lay or Jeff Skilling, I might take this guilt-by-association a tiny bit seriously.
 
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Bob001 said:
You didn't read the link, did you?
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Okay, I checked it out. First major red flag:

How did Holmes get her super-human skills at conning people? For a perspective on that, I interviewed a psychiatrist and inventor who was friends with her parents and watched Holmes grow up -- ultimately being sued by Theranos over a patent that cost him millions to defend.

Richard Fuisz, M.D, is a Georgetown-educated psychiatrist, inventor, and former CIA agent who has known Elizabeth Holmes since childhood. As Carreyrou's Bad Blood documents, he was the defendant in a lawsuit filed by Theranos in 2011 against Fuisz and his son, John.

After spending $5 million defending the lawsuit, Fuisz settled in 2014 in what he called a "kill the dog" agreement in which neither party received anything from the patent.
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So four "startling insights" from the guy who lost $5 million fighting Holmes in court? Oh, and fortunately he's a psychiatrist, so we can get deep into her psyche:

Fuisz said that Elizabeth's parents were striving to improve their position in the world. As he said, "The Holmes family -- parents were Christian and Noel -- were our neighbors in Virginia. They were very political and aspired to use their Washington connections to get money. Our kids grew up with their kids. They were jealous of our family. I was a physician who had many patents and made money off of them and knew Arabic."
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Noel programmed Elizabeth to be like me, invent and learn a language.
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Let's remember what you wrote:

And apparently both of Holmes' parents played an aggressive role in promoting her, even from childhood.
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Since this is the only part of the article that actually talks about something in her childhood, I do have to wonder at the horror expressed about this supposed aggressive promotion. Her parents pointed at the renaissance gentleman (doctor, inventor, exotic language learner) next door as someone she should emulate, and this is something bad?

Now all that said, I do tend to agree with his assessment of Holmes herself. Watching the documentary (Out for Blood) I was mostly struck by how unimpressive she seemed. And yet some very sophisticated people who met her back then thought the exact opposite. Note the VC quoted in 2009:

My assistant said I had a call from Beijing. 'Of course I’ll take the call.' He said, 'You’ve got to meet this young lady [Elizabeth Holmes]!' I said, 'John, what?' 'You’ve got to meet her; she’s fabulous.' 'Okay.' I’m figuring twenty minutes, right? This young lady comes in; I think she probably was 21 years old at the time and had left Stanford, didn’t graduate, and she had a company called Theran[os]. And I thought this was going to be a short conversation. Well, now I’m chairman of the board and spend a lot of time with her and the company and she’s doing super!
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Brainster said:
.....
Now all that said, I do tend to agree with his assessment of Holmes herself. Watching the documentary (Out for Blood) I was mostly struck by how unimpressive she seemed. And yet some very sophisticated people who met her back then thought the exact opposite. Note the VC quoted in 2009:
....
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Possibily equally relevant:
With her family's background -- [her great, great grandfather, Christian R. Holmes, was a surgeon who had Cincinnati General Hospital named after him and married the daughter of Charles Fleischmann who founded the yeast company and was her great, great, great grandfather] -- why is she so insecure? That family background was part of the con. She would be introduced and when questions were asked about her scientific knowledge or business acumen, these family members would be brought up.
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That's part of what sounds like an affinity scam. She was telling rich, powerful people that she was one of them by virtue of her family connections. If an average undergrad could even get a meeting with people like this, as soon as she said "I'm building a device that will...." they would have said "Prove it! Show me the numbers!" But not this pretty blonde.
 
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Bob001 said:
Possibily equally relevant:


That's part of what sounds like an affinity scam. She was telling rich, powerful people that she was one of them by virtue of her family connections. If an average undergrad could even get a meeting with people like this, as soon as she said "I'm building a device that will...." they would have said "Prove it! Show me the numbers!" But not this pretty blonde.
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Really hard to feel that bad for the victims of this scam. It's all rich people who are braindead from huffing their own farts and actually believe stupid things like you describe. Investing in some moonshot device based entirely on some sap story about being afraid of needles, FOMO from seeing all your other elite buddies plow money in, and an eccentric in a turtleneck promising to "disrupt" the market. Holmes was the dumb guy's idea of a smart businesswoman, and luckily for her there are no shortage of rich dumb guys in this country willing to throw money at her.

The people plowing money into this thing are rich exactly because of their relationships with other wealthy people. The idea that there should actually be any merit to an idea is a totally foreign concept who's entire world revolves around personal connections and status. God Bless Theranos for fleecing the DeVos family, Kissinger, and all these other ghouls.
 
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SuburbanTurkey said:
Really hard to feel that bad for the victims of this scam. It's all rich people who are braindead from huffing their own farts and actually believe stupid things like you describe. Investing in some moonshot device based entirely on some sap story about being afraid of needles, FOMO from seeing all your other elite buddies plow money in, and an eccentric in a turtleneck promising to "disrupt" the market. Holmes was the dumb guy's idea of a smart businesswoman, and luckily for her there are no shortage of rich dumb guys in this country willing to throw money at her.

The people plowing money into this thing are rich exactly because of their relationships with other wealthy people. The idea that there should actually be any merit to an idea is a totally foreign concept who's entire world revolves around personal connections and status. God Bless Theranos for fleecing the DeVos family, Kissinger, and all these other ghouls.
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I don't and can't agree with your schadenfreude here. These investors were materially lied to, and they deserve the maximum possible restitution.

But I totally agree with your reasoning around how/why Theranos and Holmes managed to extract large sums of money from wealthy private individuals (and also wealth management funds, VC funds and angel investors). I've worked on VC deals, and you're entirely right to point out what looks superficially to be strange investment dynamics.

The way it works is as follows (for wealthy individuals and institutional investors alike):

For early-stage dotcom and "blue sky" ventures, investors typically adopt a portfolio approach to allocating funds. They know very well the metrics and expectations around the generation of returns. The most common expectation is colloquially defined like this: for early-stage investments in these sorts of companies, they assume 12 will go bust and they'll lose all their equity investment; 5 will generate low (but acceptable) levels of shareholder returns and exit valuation; 2 will generate very good (better than the S&P 500) returns and exit valuation; and 1 will become a huge success.

So in other words, early-stage investors in Theranos were not automatically expecting that the company would evolve into a hugely valuable and profitable endeavour. But the fact that they were so egregiously lied to by Holmes and Theranos is, nevertheless, something that these investors neither deserved nor should have expected.

Theranos was a "perfect storm" situation. The product (which, it turned out, was a pack of lies) was extremely compelling - had it worked, and had Theranos been properly-run, early-stage investors would have been entitled to expect that this was an investment which stood every chance of being up near (or at) the top of the portfolio calculation I mentioned above.

On top of that of course, Theranos had Holmes. She was articulate and persuasive; plus (and this cannot be minimised or discounted as a factor) she was a young, attractive, glamorous, go-getting woman. VC and private investors almost always encounter start-ups run by either a) nerdish young men with few social skills, or b) ex-Wall Street investment bankers or management consultants, who can be quite intimidating and rank-pulling in their pitches for funding. Holmes was very different from those stereotypes. And I don't doubt that this formed a significant driver of many decisions to invest in Theranos.
 
LondonJohn said:
I don't and can't agree with your schadenfreude here. These investors were materially lied to, and they deserve the maximum possible restitution.

But I totally agree with your reasoning around how/why Theranos and Holmes managed to extract large sums of money from wealthy private individuals (and also wealth management funds, VC funds and angel investors). I've worked on VC deals, and you're entirely right to point out what looks superficially to be strange investment dynamics.

The way it works is as follows (for wealthy individuals and institutional investors alike):

For early-stage dotcom and "blue sky" ventures, investors typically adopt a portfolio approach to allocating funds. They know very well the metrics and expectations around the generation of returns. The most common expectation is colloquially defined like this: for early-stage investments in these sorts of companies, they assume 12 will go bust and they'll lose all their equity investment; 5 will generate low (but acceptable) levels of shareholder returns and exit valuation; 2 will generate very good (better than the S&P 500) returns and exit valuation; and 1 will become a huge success.

So in other words, early-stage investors in Theranos were not automatically expecting that the company would evolve into a hugely valuable and profitable endeavour. But the fact that they were so egregiously lied to by Holmes and Theranos is, nevertheless, something that these investors neither deserved nor should have expected.

Theranos was a "perfect storm" situation. The product (which, it turned out, was a pack of lies) was extremely compelling - had it worked, and had Theranos been properly-run, early-stage investors would have been entitled to expect that this was an investment which stood every chance of being up near (or at) the top of the portfolio calculation I mentioned above.

On top of that of course, Theranos had Holmes. She was articulate and persuasive; plus (and this cannot be minimised or discounted as a factor) she was a young, attractive, glamorous, go-getting woman. VC and private investors almost always encounter start-ups run by either a) nerdish young men with few social skills, or b) ex-Wall Street investment bankers or management consultants, who can be quite intimidating and rank-pulling in their pitches for funding. Holmes was very different from those stereotypes. And I don't doubt that this formed a significant driver of many decisions to invest in Theranos.
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Yeah, but the lies were really stupid, and even the slightest bit of due diligence would have shown that this was a bad investment.

I'm not saying that Holmes isn't a fraudster, I'm just saying she found the perfect victims who had way more money than brains.
 
LondonJohn said:
On top of that of course, Theranos had Holmes. She was articulate and persuasive; plus (and this cannot be minimised or discounted as a factor) she was a young, attractive, glamorous, go-getting woman. VC and private investors almost always encounter start-ups run by either a) nerdish young men with few social skills, or b) ex-Wall Street investment bankers or management consultants, who can be quite intimidating and rank-pulling in their pitches for funding. Holmes was very different from those stereotypes. And I don't doubt that this formed a significant driver of many decisions to invest in Theranos.
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I once helped a friend try to start a business that would have required a significant amount of venture capital. His idea ended up being rendered impractical by a change in federal law and a Supreme Court decision, so he abandoned the project. However, one thing that I learned that's always stuck with me is that VCs would rather invest in a B idea with an A management team than an A idea with a B management team.
 
SpitfireIX said:
I once helped a friend try to start a business that would have required a significant amount of venture capital. His idea ended up being rendered impractical by a change in federal law and a Supreme Court decision, so he abandoned the project. However, one thing that I learned that's always stuck with me is that VCs would rather invest in a B idea with an A management team than an A idea with a B management team.
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Under the assumption I suppose that the VCs believe that "those guys" must know hat is going on even if I don't. So the trick is to offer someone "important" a sinecure position at a tempting salary and then play up his involvement as endorsing your B type claims. Once things are on a roll you are on your way| Now I get the picture. FOMA anyone? :cool:
 
SpitfireIX said:
I once helped a friend try to start a business that would have required a significant amount of venture capital. His idea ended up being rendered impractical by a change in federal law and a Supreme Court decision, so he abandoned the project. However, one thing that I learned that's always stuck with me is that VCs would rather invest in a B idea with an A management team than an A idea with a B management team.
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Which makes sense, from an investment-risk point of view.

But also makes the Theranos case interesting, since it seems the VCs were investing in an A+ idea with at best a B- management team.
 
theprestige said:
Which makes sense, from an investment-risk point of view.

But also makes the Theranos case interesting, since it seems the VCs were investing in an A+ idea with at best a B- management team.
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Was the idea A+? Seems that anyone with technical experience in the relevant fields understood that the goals were simply out of reach with current technology, and there was no reason to believe that Theranos had any special insight to solve the fundamental problems.

Seems to me that Theranos used the same silicon-valley promoting that works well (sometimes) in that industry but does not translate well to others.
 
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I just got around to watching on my PVR the episode of American Greed, "Theranos CEO on Trial" which aired on Jan 12.

Worth a look if you can find it. It appeared to cover the whole sorry story.
 
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