Select Investors: Blue Cross Blue Shield Venture Partners, Fortress Investment Groupįailed blood-testing startup Theranos was one of the biggest startup frauds ever perpetuated. Theranos and the revolutionary blood tests that never existed Pseudo: Entrepreneurship as performance artġ.Crescent Ridge Capital Partners’ elaborate Ponzi scheme.Asenqua Ventures, the shell game disguised as a VC firm.
WrkRiot’s short-lived house of cards falls down.Rothenberg Ventures breaches ‘fiduciary duty’.Virgin Hyperloop One’s utopian vision derailed by fraud.Hampton Creek busted buying its own merchandise.LendingClub founder violates own company’s business practices.The Honest Company not so honest about labeling.Theranos and the revolutionary blood tests that never existed.And others disappear forever.īelow, we take a look at the stories behind 16 embattled startups, and the lessons they can teach entrepreneurs hoping to launch their own products, companies, and funds. Others are forced to rebrand in an attempt to distance themselves from the notoriety of their founders. When that’s happened, some companies survive. Some companies just push their luck a little too far. There’s almost always an element of “fake it ’till you make it” for a successful, disruptive startup.
From Theranos, the blood testing startup that never had even a glimmer of a truly working product (but still raised more than $700M) to Hampton Creek, the vegan mayo brand that was caught buying its own merchandise in bulk to inflate its sales numbers, the freedom and innovative energy of the Valley has, at times, been used to fuel a variety of possible startup scams and frauds.