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Don’t chase the fads.
The most shocking thing about the collapse of Theranos is that people are shocked. Well, I suppose that isn’t fair. The story is shocking, without a doubt. As detailed in John Carreyrou’s new book, “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” Elizabeth Holmes lied constantly about every aspect of her business, its products and anything else – reaching a valuation upwards of $9 billion before reality came crashing down around her.
But the primary deception around the efficacy of Theranos’ supposed breakthrough compact blood-testing technologies really shouldn’t be that shocking at all. Because what has become very clear about the star-studded list of venture capitalist backers, board members, fawning journalists and investors is that none of them understood the technology or bothered to evaluate it for themselves.
This isn’t the first time we have seen brilliant investors left naked and exposed over a shameful lack of due diligence. The documentary film “The China Hustle” has exposed accounting irregularities and what appears to be rampant fraud amid the Chinese reverse-merger boon. Again, investors were exposed after assuming due diligence had been conducted by institutions that, as it turned out, had done no such thing.
This article was published by The Street, please click this link to read the article.