In the case of Theranos I believe it was this. Elizabeth Holmes seemed to have an "in" with a lot of Washington D.C. influencers and I'm pretty sure her pitch was based on using those connections to score lucrative DoD contracts.
her father has that "in". USAID is sometimes a cover for CIA, and the "network effect" here has been extremely high.
If you needed to find government patrons willing to invest in a corrupt organization and engender goodwill at the same time, USAID is not a bad choice.
To the specific scenario, when N is small all kinds of idiosyncratic bad decision making can happen.
I'd love some examples of good plays in this area (that is, those that resulted not just in acquisition but viable products). This area being life science tools/diagnostics.
From the companies I've been it seems to be biased toward crazy plays that had a stack of money thrown at them. Honestly would like to hear about others, know where to read about others.
At Aperio I was on the team that designed a digital pathology instrument. At the time this was pretty new tech. We were purchased by Leica a little more than four years ago.
After that I went to epic sciences. We will be releasing our first LDT this year in a partnership with Genomic Health. It's a blood based prostate cancer test with demonstrated clinical utility, the first of its kind in the CTC space as far as I'm aware.
The need for venture financing arises when you're anywhere below 100% reliability, and are temporarily in this "fake it 'til you make it" category where the company has to rely on regular doses of cash infusions without much to show for (potentially) years. The problem with that approach is that for some the "make it" never quite materializes.
When your CEO founded a company after only a semester of a Chemical Engineering program, there should be red flags everywhere.
There's the one story that you can read in articles like this, which will provide details of the rise and fall:
http://www.vanityfair.com/news/2016/09/elizabeth-holmes-ther...
But, there's another side: it happened because you weren't allowed to question Elizabeth Holmes. The beauty of the Internet is its natural history keeping. If you want more insight into how this sort of thing happens, look no further than early discussions about Theranos on these very boards. It was difficult to be critical, and supporters implied that the naysayers were merely "sexist". Of course, this was happening when tech industry sexism was peaking in the news cycle, and I belive that quieted some criticism.
Where?
Story from two years ago, before it blew up: https://news.ycombinator.com/item?id=9440595 - Lots of criticism, some even calling it a scam, yet no mention of sexism nor heavy downvotes.
The original submission: https://news.ycombinator.com/item?id=6349349 - Some criticism, not downvoted nor called sexism.
Tell me, where are all those comments warning us about the impending doom at Theranos and getting silenced by supporters calling them sexist?
There have been nearly 500 Theranos articles posted here over the years. You conclude it didn't happen after looking at two?
As someone who participated in the conversation, I know it happened. I'm not overly concerned with combing through the articles to convince you. The OP asked "how this happens"; if you don't think "girl power" at a time when sexism in tech was all over the place was one of the factors that led to an unqualified 20-something overseeing a potential giant fraud, I'm not sure what to tell you.
I looked at the two I could find with comments from before the whole thing blew up. The vast majority of posts about Theranos are post-blowout, from the past year and half, not those early discussions you were referring to.
> if you don't think "girl power" at a time when sexism in tech was all over the place was one of the factors that led to an unqualified 20-something overseeing a potential giant fraud, I'm not sure what to tell you.
I find your restatement of the previous claims inaccurate. You said "It was difficult to be critical, and supporters implied that the naysayers were merely "sexist"", which is much more specific that her gender having been a factor in story. Yes, it might have. Not in the way you portrayed it, though, in my opinion, at least not in HN.
It seems like there's a pattern of high profile failures of highly funded science-based startups.
From the outside the science seems faulty from the start, the management team seems to have no strong scientific background.
Do investors really fund purely based on their force of personality? Personal connections? Do they see a big market and then ignore the scientific DD?
I'd love to understand this better.