Were Theranos Investors Also to Blame?

Tyler Shultz says the old white men who backed Elizabeth Holmes were the mark, and they are also responsible. They gave her power, money, and credibility, and they did not do their diligence. On paper, the people who gave her $100 million checks are the victims. In his take, they are part of the problem.

The same pattern happens all the time in investing. The backers pointed at other people who they felt knew what was going on. Rupert Murdoch pointed at Larry Ellison and called him a genius. Larry Ellison pointed at George Shultz and called him a genius. George Shultz, his grandfather, pointed at Channing Robertson and called him a genius.

Channing Robertson was the kernel of credibility that snowballed the rest. The investors who wrote the $100 million checks still gave Elizabeth Holmes the power, the money, and the credibility, and they still did not do the diligence.