Fraud in the air!

Back in May, I wrote that I sensed that there was fraud in the air. I had a sense that given the funding environment of 2021, there was going to be a lot of companies potentially blowing up. I had hoped that none would come to the level of Theranos fraud. Unfortunately, here we sit a couple weeks after the FTX debacle.

Hopefully, this will be the last of the Theranos / FTX level fraud situations. But I do believe we’re unfortunately just at the beginning stages of other companies unraveling. Now I don’t think all these situations will be outright fraud like we saw with FTX, but as I wrote in May there’s going to be a lot of these companies navigate the gray.

A historical funding environment has created a situation where a lot of companies are running without oversight. This leads to founders/executives at companies perhaps having too much power. Whether it’s a misalignment of incentivizes or executives acting unethically, we’re likely going to see a few more unfortunate bad news headlines in the next few months.