In many ways, the massive fraud perpetuated by blood-testing start-up Theranos could not have happened without the lines between traditional technology VC and health care VC blurring.
The writer who first exposed the fraud, WSJ reporter John Carreyrou, joined tech columnist Eric Jhonsa and TheDeal's senior reporter David Marcus to discuss the breakdowns in due diligence that took place along the way, and its implications for investors. Carreyrou is the writer of a just-published book about Theranos and its founder Elizabeth Holmes entitled Bad Blood.
"I think there's no doubt that traditional tech and medical tech are converging -- and in some ways it's not a bad thing," said Carreyrou.
"I think medical research can benefit from the boldness, the vision and the dynamism of the traditional Silicon Valley, and I think there a lot of engineering advances that lend themselves to blending with medical research. But I do think that the Theranos scandal is a big shot across the bow. It's a big reminder that as soon as you cross the line into medicine and healthcare, you can't corners to the extent that you can in traditional tech, because you always have to remember that the ultimate customer is the patient."
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