Om Malik on the SEC takedown of Theranos founder. Theranos has been shown to have no new technology, no invention and was repackaging an existing technology with wild, fantastic claims. Yet, VCs threw $700MM at them, apparently with very little due diligence or validation of the technology.
Ousting of Holmes is an unprecedented step taken by the SEC against a private (and not public) technology company, and is a watershed moment in the history of Silicon Valley. It does not come as a surprise to me that the grim reaper of regulation is walking around in Silicon Valley. The notional values of startups are exceeding those of their public market peers, and a lot of those valuations are based on financial foundations weaker than those of a dollhouse. And what SEC seems to be saying — if you are going to play with the big boys, then you will be monitored like big boys. All those who have been wearing the “unicorn” badge need to make sure that their numbers are right — the I’s dotted and T’s crossed.
I’ve seen angel investors throw irrational sums of money at startups. I’m still baffled by it. There must be so much money available that good decisions are not required.
SEC vs Theranos & what it means for Silicon Valley – Om Malik : https://om.co/2018/03/14/sec-vs-theranos-what-it-means-for-silicon-valley/