Tim Draper Loses It: Defends Indicted Theranos CEO As “Visionary… Innocent Til Proven Guilty”

    Via Valuewalk.com,

    This is a good lesson in cognitive dissonace in investing and what not to do…you must watch this.

    Despite CEO Holmes admission that Theranos “tech” was a fraud  and restating years of earnings, and having now been indicted on nine counts of wire fraud and two counts of conspiracy to commit wire fraud; Venture Capital ‘guru’ Tim Draper stuck to his mantra of defending Theranos and accusing journalists of destroying the company.

    Billionaire investor and early Theranos backer Tim Draper discusses supporting Elizabeth Holmes after her fraud charges, how more journalists will try to take down CEOs to get rich, and why he’s not soured on investing in young, visionary startup founders.

    Tim Draper Defends Theranos Founder As ‘Innocent Until Proven Guilty’

    Full Transcript

    It’s really interesting. Every really great company does get a major challenge from its competitors or from legal system or from government or from press.

    They get these challenges and some companies survive those challenges and become great companies in the future and some companies are are so burdened by those challenges that they they are forced to sort of fail.

    And and I’ve seen it in any different industry. I mean from Napster being attacked by the music industry to Uber the CEO of Uber being attacked by the taxis too fast for being attacked by the car companies sky by the long distance carriers. We’ve had a lot of great successes a lot of great failures too.

    Do you still stand by Elizabeth Holmes despite the indictment? …[cut off]

    I’ve always believed innocent innocent until proven guilty. And and she has. She is an entrepreneur. She. Her mission was to change health care as we know it to make it easier system.

    And she was doing really good work and then she got the attack and the attack came so soon that she wasn’t I believe she wasn’t prepared for it.

    So you’ve said over the last couple of months rather consistently that she was the victim of a media instigated witch giant. You’ve been dismissive of the Wall Street Journal and John Kerryrou – the investigative reporter that delved into that story… [cut off]

    Yeah, that guy made a lot of money off of this.

    Well now we’ve got a government who said Friday that it wasn’t…  [cut off]

    Now, journalists are looking at this and going “hey all I have to do is take down Zuckerberg and then I guess I got a movie deal and I did something or whatever.”

    OK. So it’s one thing to put that on the media. But now we have the government saying that it’s not just Elizabeth Holmes that’s all of Theranos was effectively one big scam. So do you stand by what you’re saying. Do you believe that the government is wrong.

    Well it’s ridiculous. And I don’t think the government saying anything the Government’s looking for the facts and they’re going to come up with a fact. And the reason they’re looking for the facts is the media created such a strong frenzy that they had to look at it. I mean if I’m the government and the media has created this frenzy I’m going to have to look into it. And so I think they’re going to.

    You were an early investor and there now as you have been somewhat of a mentor to Elizabeth Holmes. She is reportedly raising money for a new start up. Would you would you back her next project?

    I don’t know. I haven’t looked at it really. I mean I’m we’ve moved on. We’re looking for whatever the next great thing is and I haven’t seen that so ahh, don’t know.

    Have you spoken with Holmes since the charges?

    Oh yeah. Yeah. I mean I talk to her periodically. I think she’s I feel for her she’s really you know she came in you know Pollyannish going in there saying with great optimism how she was going to change healthcare as we know it. And I think she has… but maybe not with her company…

    I know the company is going to be better this year and then we can rally all the time that’s our investments. So you know I’m just you know I talked with her just to be friendly.

    We see that in Silicon Valley all the time having a visionary founder is not always on par with being a good leader and a good CEO. Does what happened with and has changed the way you do due diligence?

    Oh I hope it doesn’t. I hope that I hope I continue to back really great entrepreneurs with really ambitious aspirational ideas and things where they’re really going to try to change things. I hope I’m not tarnished and I don’t think I am still am looking for those those changes that are that are going to cure cancer and help world hunger and get us off the planet and get us flying around without a lot of energy on the planet. I mean all those communicating around the planet I’m interested in all those things.

    And and I will continue to back that or and hopefully I think health care is really in for a really interesting transformation… It may be blockchain-related, but yeah, I think I’ve still got it.

    “Know when to fold ’em… and walk away” Tim…

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