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Comment by fortran77 | Hacker News Reader

The people who trusted and enabled Charlie Javice or Elizabeth Holmes are guilty, too. Trusting someone just because their story sounds good without due diligence is wrong, and unfair to people who do real work.

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It really is surprising how little diligence work seems to have been performed. With how brazen most of these "Fake it to make it" startups have been, I have a hard time not agreeing with you.

I do think some of this equates to a pump and dump with investors and ultimately the buyer.

What due diligence are you going to bother to do as a VC when your own business model is built around slapping a pile of paint on a rickety structure of fabricated sales projections and selling that to to other people for 10-100x what you paid?

The whole VC system is fundamentally broken and is hurting actual value being created.

A certain number of venture capitalists achieved that status after having been well-funded founders, exactly by faking it from the beginning until their companies were actually (with good fortune) viable enough to sell for more than their investors had put up.

So many have come out so far ahead financially that way, there has got to be some consensus that it is a proven success model. For some I would say that is all they know about success.

I dunno. The enablers are VCs, and the people paying for it are the LPs. They're all big boys playing with risky investments. Unless the VCs are the ones committing fraud, I'm less concerned. All of these investments are limited to accredited investors for a reason: they're largely unregulated and lack supervision. That's what you're signing up for.

How come JPMorgan doesn’t get any blame for the Charlie Javice situation.? Under what circumstances is it appropriate to close that deal without validating customer data. You could have put it in escrow immediately before closing.

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