Yes, but why do they have so much money? So a 19 year old walks up to an investor and says:
"Give me $16 million. I've got an idea for a new way to do blood tests. It doesn't work yet, and I've got less than a year's experience in the field. But I'm wicked smart because I learned Mandarin as a child, and my professor believes in me. Oh and by the way I'm going to maintain control of my company and never want to give up more than 50%"
That surely didn't happen. She must have something that at least looks very impressive to have negotiated those terms, but what I don't understand is why no one is talking about what that is. They have patents to protect them. Why aren't they releasing peer reviewed studies?
Money attracts money. This is perhaps the long-tail of the investment insanity which happened over the past decade and culminated in the GFC for the finance sector. It somewhat stands to reason that the fiscal fervor of the times has perhaps just fallen into an area where the payoff period is typically longer.
There's a very good reason to be skeptical when the most anyone can say about the company is the composition of it's board - noteworthy, but I wonder how often that was used to pitch to each of its members.
It's worth rereading the story of Enron when parsing things like this - there's a lot of parallels.
Given what has occurred elsewhere in the economy in recent years, the fact that people have thrown lots of money at a compelling story means nothing without being able to look inside the box to see what is going on, Bernie Maddox managed to get a lot more money raised than these folk.
You don't raise that kind of money without DD. So presumably somebody got to look inside the box but they did not make it public. That's pretty common in the tech investment world.
Presumably someone did, but it would not at all be unheard of for due diligence to not be particularly diligent at all and for later investors to then trust to the diligence of the earlier ones, as after all, being thoroughly diligent is exceedingly expensive and why double up when someone else has already checked...
I would agree that you usually do not raise that kind of money without reasonable DD, but there are more than enough counter examples out there of people bullshitting investors out of very large sums, both deliberately and through deluding themselves.
That does happen but less frequently than you probably think. In this case there was a company with a track record and a bunch of tech which could be audited, that's a relatively straightforward affair. It gets a lot harder in early stage 'virtual' (as in: no physical product) companies.
Good find! I'm curious what their long term plan is, if they're going to stay private or IPO at some point. If they IPO you can expect a lot of information to become more widely available than it is today.
If you've got the money, you too can have a board like that.