Fraud in the air?

I believe one of the story lines to watch in the coming few months is the unraveling of some companies and accusations of fraud. At most of VC backed startups, you raise money before ever building a product or generating revenue from selling that product. This creates an interesting situation where entrepreneurs are taught to dream things into existence while at the same time bring given often large sums of money to build said thing.

Naturally, we’ll see situations where lots of entrepreneurs never actually build a product that generates revenue. On the extreme end, we see Elizabeth Holmes where she pretended that her Theranos blood testing system was actually fully functioning. We now know that was completely false.

On the other end, we’ll see a lot of people selling products that may severely under deliver. Perhaps there may be even more to the story that leans towards more of a Theranos situation.

I’ve had a lot of spidey senses about some companies in the last few months. Hopefully none come close to Theranos levels of fraud, but I do feel like we’re in for a bit of a reckoning given the capital environment of the last year.

We’ll see, but I suspect there to be more Netflix documentaries in the near future.