This is likely the beginning of the end. With such a massive loss of trust, especially in the healthcare space, it is hard to see how the company could ever recover in the eyes of customers, investors or employees.
Maybe she will run for president in a few years. She certainly has what it takes for a successful political career.
Investors agree to this for a few reasons. Firstly, it's a way for them to get a larger stake in the company. Secondly, it reduces the risk of the founders taking an early exit because they are strapped for cash. Finally, in a competitive deal (against other investors) it can be a way to sweeten the deal and get selected over the competition.
Investors don't want founders to be worrying about money - they want them to be focusing on their company.
[1] http://www.forbes.com/sites/petercohan/2015/11/03/theranos-l...