Is this common among VCs and investors in general, or was it just that Theranos' supposed technology was more complicated than what they were used to, so they couldn't accurately assess it? Or both?
Investors will invest in all kinds of stuff they personally have no knowledge of. This is perfectly ok if it is their own money and they have no responsibility to others (especially to limited partners who have no say in the matter, or, for instance in the case of a pension fund).
The way it works with such parties is that they hire people who are versed in the technology to prepare a report on the subject at hand. This is called 'due diligence', specifically, technical due diligence.
So if you cross the t's and dot the i's there will be a nice report saying 'this technology is a-ok' by some party in a drawer somewhere. If so then that party shoulders a large part of the blame. Absent such a report (and I find it hard to believe the investors did not perform due diligence, but then again, so far none of them have stepped forward to point the finger at their technical advisors) the investors themselves are far more responsible.
