> They think they can just unload to some sucker for a big payday. See also the entirety of cryptocurrency.That's also the entirety of the biotech VC industry, except even more so.
Biotech startups require far more capital to make it to market than tech startups, so biotech VCs take the role of early stage funding for R&D. Then the startup IPOs (with zero revenue and unlimited scientific risk) and uses that to fund its clinical trials, while the investors dump their stock. Then, because ramping up manufacturing and quality control takes even more money, the biotech startup sells out to a pharmaceutical company once its passed its trials or the results are promising enough to take the risk, closing the financing loop. Most of these startups stop existing before they even earn a single dollar in revenue, either because they fail or they're acquired by someone who can actually manufacture and distribute their product at scale. This has been the way of the industry for at least the last 20-30 years ever since the small molecule cliff hit like a brick wall.
So, the VC industry whose standard operating procedure is to unload companies onto public investors long before anyone even knows whether the drug or device would work, wouldn't touch Theranos with a thirty foot pole.