← Back to context

Comment by Rastonbury

5 years ago

Are you serious? Legitimacy (not being a scam) and ability to execute contribute heavily to successful outcomes. Any VC who invests in every shady startup claiming to become the next Google/FB is gonna go broke

4 comments

Rastonbury

Reply
nikanj  5 years ago

Seems like Theranos, UBeam etc have no trouble raising money, despite every domain expert saying their goals are impossible according to our current understanding of physics

  • tomhoward  5 years ago

    Y Combinator didn't invest in either of these companies. With Theranos, most of the investors weren't VCs. The ones who were were had family/personal connections to Elizabeth Holmes. They've been made to look stupid, and everyone knows if they kept doing deals like that they'd go bust. UBeam had several top VC investors, but they must have been convinced that the original technology demo was legitimate, and that it could be productized and scaled. The skeptics against UBeam only came out later, after they'd already raised their big money. Again, they know if they keep doing deals like that, they'll go bust.

  • dagw  5 years ago

    And I suspect many of those early investors in Theranos made a very nice return on that investment, so obviously ignoring the domain experts wasn't such a bad move for them.

    • tomhoward  5 years ago

      Nobody is likely to have made money from Theranos - it went bankrupt. Maybe there were some isolated cases of private stock sales by early investors, but this doesn’t normally happen with big investors, as it’s a sign of no-confidence in the company, so major investors can’t do it without harming the reputation and value of the company, including the value of the stock they’re trying to sell.