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Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

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Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#451

Post by ascendantlogic »

brandmeyer wrote: post #448
ascendantlogic wrote: post #283

Earlier quoted context omitted.

Yes, if you want to lie about some drone-based burrito delivery service you're probably not gonna draw the same ire as life-saving medical equipment. Although if you swindle investors for over $700 million in either case I imagine the SEC will be knocking at your door eventually.

> drone-based burrito delivery service Not joking, I have heard this pitch.

A few years ago that would have been peak Silicon Valley but now it would have to be a drone-based burrito delivery service settled on the blockchain to be peak SV in 2018.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#452

Post by rb808 »

mikeyouse wrote: post #375
onecooldev24 wrote: post #331

Earlier quoted context omitted.

What about the fact that Holmes actually lost money for investors and got no jail time. While martin lost no money but got 7 years of jail time. Where is the fairness? I am surprised by the stupidity I view on this forum, which is suppose to be frequented by people working in top tech.

Maybe cool it on the insults if your facts aren't right. > What about the fact that Holmes actually lost money for investors and got no jail time. While martin lost no money but got 7 years of jail time. A few things about this point. 1. Shkreli lost 100% of his original investors' money. He then lied to them all and told them that he doubled it. He then created fake financial statements that he used to raise new mon…

> 1. Shkreli lost 100% of his original investors' money.

Source? I hadn't heard that.

http://fortune.com/2017/08/05/why-martin-shkreli-is-guilty-w...

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#454

Post by vadimberman »

joering2 wrote: post #370
ericd wrote: post #326

Earlier quoted context omitted.

That's one way to get funding, but it's certainly not the only way, there are lots of counterexamples. As one obvious counterexample, one of the founding principles of YC is providing an open application process to provide people who don't have any personal connections access to the SV network. Larry and Sergey weren't well connected when they started, either, afaik, as most PhD students aren't. If you're doing somet…

> Larry and Sergey weren't well connected when they started, either, afaik, as most PhD students aren't. Doubt it. I don't think In-Q-Tel/CIA will write you a check because you just happen to have this shiny new search engine that may or may not change the world.

In-Q-Tel is NOT CIA nor its "venture arm" contrary to the popular misconception, and it's actually one of the more open VCs.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#455

Post by c3534l »

lxm wrote: post #74
ChuckMcM wrote: post #23

Ok, this is the money line in that press release for me: “The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.” For all those entrepreneurs are trying to "fake it until you make it" be aware that the SEC considers your…

I interpreted it somewhat differently. The money paragraph seems to be > claimed that Theranos’ products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters and that the company would generate more than $100 million in revenue in 2014. In truth, Theranos’ technology was never deployed by the U.S. Department of Defense and generated a little more than $100,000 i…

I had to go through a bunch of SEC cases for an accounting project a while back. One thing stood out to me more than anything: the SEC goes after cases that are easy more than anything else. Multiple crimes committed with lots of evidence and easy-to-spot damages. It actually gave me the impression that avoiding the ire of the SEC is relatively easy if you set your mind to committing fraud without getting caught.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#456

Post by make3 »

mathattack wrote: post #409
spaceflunky wrote: post #325

Earlier quoted context omitted.

>This will wipe her out Will it though? Surely Holmes still has a few million stashed away somewhere that she can live comfortably off of? This settlement isn't going to leave her destitute. Either that or I'm sure she set up some clever offshore accounting structure that has $10M stashed in the cook islands or some shit. As soon as you get some cash, I think "rich person 101" is you set up some complicated structure…

I should be more precise... This wipes out her Theranos stock. Who knows what she paid herself. Her VC was a family friend, so I suspect she has family money, and may stand to inherit Palo Alto real estate. The big difference is for all the time invested, her current stock is worth zero.

She lied, and doing so stole people's money, and maybe hurt some people's health. Who cares she got nothing from what she did. That's how it usually works for startups anyways, you risk having wasted your time. That's why we need making it worse, a stronger deterrent then her company dying, otherwise lying can be seen as acceptable to prevent a compagnie's death, as the only negative side effect is the company dying

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#457

Post by vadimberman »

ericd wrote: post #326
Noughmad wrote: post #286

Earlier quoted context omitted.

SV/tech/USA is so great, anyone can make it big. You just have to be smart and work hard. Oh, and be family friends with billionaires. Yeah, that's all.

That's one way to get funding, but it's certainly not the only way, there are lots of counterexamples. As one obvious counterexample, one of the founding principles of YC is providing an open application process to provide people who don't have any personal connections access to the SV network. Larry and Sergey weren't well connected when they started, either, afaik, as most PhD students aren't. If you're doing somet…

> Larry and Sergey weren't well connected when they started, either, afaik, as most PhD students aren't.

That was 20 years ago. As much history as Larry Ellison's story in 1970s. Things have changed a lot, and the Silicon Valley today is a poster child for cronyism.

The VCs don't even bother opening "cold emails" (a ridiculous term for something that purports to be an open club). It's a herd of arrogant hipster bros who have no clue what they're doing and try to CYA by "warm introductions" (when their bet fails, they can shift the blame on a 3rd party).

The investment is not completely off-limits (my own story is a testament to that), but it's magnitudes harder to get if you're not connected, and oftentimes you have to pay through the nose to the "people who know people". I also know some rare cases when super-angels answer to complete strangers and subsequently invest, but these are exceptions rather than the rule.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#459

Post by [deleted] »

BadassFractal wrote: post #394
Balgair wrote: post #280

His name is Tyler Shultz. He is the main reason we know know what Theranos was doing. He had his life destroyed, he knew it would happen, what Theranos would do to him, and he did the right thing all the same. Tyler Shultz is a hero. Never let someone tell you that you don't matter. Try hard to do what is right. We need more people like him, be one of them too. Be like Tyler Shultz. https://www.vanityfair.com/news/20…

I liked the bit where they tried to use the "women in tech are oppressed" narrative to cover her ass: > Tim Draper, the founding partner of Draper Associates and Draper Fisher Jurvetson, appeared on television on Tuesday—not for the first time—to defend Holmes and Theranos. In an interview on Closing Bell, the world’s most loyal V.C. said Holmes has been “totally attacked,” and that she is “a great example of maybe w…

[deleted]

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#460

Post by goatherders »

sgt101 wrote: post #367
wpietri wrote: post #218

Earlier quoted context omitted.

I think the Concierge and Wizard of Oz approaches [1] are just one thing people mean by "fake it 'til you make it", but I definitely don't think they're the most common meaning. Startups engage in all sorts of puffery, trying to project the appearance of success long before they have actual success. Fancy websites, fancy offices, sales and investment pitches that cherry pick stories, numbers, and milestones that give…

This is fine when the elements of automation aren't beyond the state of the art. However when you have startups like Spinvox et-al hoping that automated transcription will show up and save them (I mean transcription of variety of voice in variety of environments, using uncharacterized microphones and transcoded from mobile to core ect) or the current rash of chatbot liars and charlatans then real real damage gets don…

Isn't uber just waiting for automated drivers (self driving cars) to show up and save them? I have three businesses at the moment that all use people to do things that maybe one day can be solved by AI/tech. My customers don't care how I get it done and aren't impressed by tech anyway. If automation shows up and helps me then my margins go through the roof. But as it is, the margins are pretty good anyway.
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