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Theranos | Are Venture Capitalists to Blame? | 4

Theranos | Are Venture Capitalists to Blame? | 4

Tue, 05 Oct 2021 07:01

Lindsay sits down with Charles Duhigg, a Pulitzer Prize-winning journalist who covers the tech industry. The two explore why venture capitalists work to create monopolies, and whether these powerful investors bear responsibility for the failures at Theranos.

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To listen to American scandal one week early and add free, join Wondry Plus in the Wondry app. Download the Wondry app in your Apple or Google Play mobile app store today. Wondry. From Wondry, I'm Lindsay Graham and this is American scandal. In the mid 2010s, Theranos grew into one of the most celebrated companies in Silicon Valley. Founded by the young entrepreneur Elizabeth Holmes, Theranos promised a revolution in medicine. The company would offer inexpensive blood tests for a variety of health conditions. These tests would only require a few drops of blood and with their availability in stores like Walgreens, millions of Americans would gain easy access to vital information about their health. It was a grand vision, but Theranos would never make good on this promise. The Wall Street Journal published a searing expose revealing problems with the company's technology and leadership. The article would ultimately destroy Theranos and lead to criminal charges against Elizabeth Holmes. Theranos became a national sensation exposing a dark side of Silicon Valley where companies often abide by a fake it till you make it mentality. It's a strategy that can help court investors, but it's also led some to wonder whether the tech industry needs to fundamentally change. My guest today is Charles DuHig, an investigative journalist and the best selling author of the Power of Habit, which explores how we can change our lives by changing our habits. He's also the author of Smarter Faster Better. As a reporter, DuHig was part of a team that won a Pulitzer Prize in 2013 for a series that looked at the global problems with the tech industry. Before becoming a reporter, DuHig worked in private equity. In our conversation, we'll look at how venture capitalists often work to create monopolies, even when the companies themselves might be troubled. And we'll discuss whether these powerful investors are ultimately responsible for failures at companies like Theranos. Our conversation is next. American scandal is sponsored by the new ABC drama Alaska Daily. When an indigenous woman goes missing in Alaska, it sparks new questions about other missing and murdered indigenous women. And that's where the thrilling new ABC drama Alaska Daily begins and where it's headed will have you on the edge of your seat. Two time Academy Award winner Hilary Swank stars as Eileen, a veteran reporter who joins a team of local journalists working to bring the truth to light. From Academy Award winning screenwriter Tom McCarthy, Alaska Daily premieres Thursday, October 6th on ABC and streams next day on Hulu. If you're into true crime, the Generation Y podcast is essential listening. We started this podcast over 10 years ago to dissect some of the craziest and most notable murders, crimes, and conspiracy theories together, and we'd love for you to join us. Follow the Generation Y podcast on Amazon Music or wherever you listen to podcasts. Charles Duig, welcome to American scandal. Thanks for having me. We've all heard about venture capitalists and how their money has helped fund the growth of tech giants like Uber, Facebook, and quite a few others. But let's start at the basics. What is venture capital and how does it work? So venture capital is any time that a group of pretty rich people for the most part get together and they hand some cash to a young company and say, we're going to take a stake in your company. We're going to take some of your stock, been we're going to give you the money that you need to grow and to become the firm that you want to be. Now what's interesting about venture capital is it hasn't actually been around that one right there's always been investors and companies, but as an organized activity it really started basically back in the 1940s when a professor at Harvard Business School discovered that some of his colleagues over at MIT had this idea for a new kind of medical technology. And so he got together some of his friends and he said, look, we'll give you some money and some advice because you're all scientists and we're all smart business people will give you some advice and give us a stake in the company and if you do well, we'll all get rich. So that's how it's perhaps different from any other financing like debt or or alone. Exactly. So debt or alone is literally a bank saying we're going to give you some money. You don't give us any stock and return, but you have to pay us back what we gave you plus some interest and debt or alone is the safest kind of investment you can make right. If that company ends up going bankrupt and they have to sell off all of their assets, the people who gave them debt, they get paid first. Now standing behind those people who gave them debt, the bank are the venture capitalists, the people who gave them money and said, you don't have to pay this money back, but you do have to give us some stock in your company. And that way we own a part of the company and by the way, if your company does well, if you have lots of profits, then we also have the right to demand some of those profits. It's interesting that you say one of the earliest examples of venture capitalism was investment in a medical technology company because this series just looked at their notes. Why are venture capitalists so often associated with technology? Are they only designed for that kind of business? Not necessarily, but I went to Harvard Business School. When I was at HPS, we learned the really Sutton rule. Willie Sutton was a great bank robber, one of the most successful bank robbers. And when eventually he got caught a reporter came up to him and they said, Willie, why do you rob banks? And Willie said, well, because that's where the money is. And that's why venture capital is investing in tech right now. And for the last 20 years or so, right? It's not the technology is something special. The venture capitalists didn't invest in other things. In fact, there's lots of venture capitalists who invest in all kinds of other things and in manufacturing companies and supply chain companies. But most of the VC dollars that we're aware of are going to tech. And that's because tech is the fastest growing industry. It's where the money is. Not only that, but the thing that we know about technology, at least as the industry is constructed right now, is that you can get these economies of scale. Right? You give someone a million dollars and they build Facebook and suddenly Facebook is worth five billion dollars. They don't have to hire a bunch of people. There's also some historical precedent here, which is that the birth of the tech industry as we think about it, the birth of Silicon Valley was rooted in venture capitalism. When Culep Packard started, which was one of the original tech companies that really created Silicon Valley, they were backed by a small group of venture capitalists when Stanford decided to start really growing aggressively to become a powerhouse university. One of the things that they did is they really put a lot of money into venture capital in the Silicon Valley area. And the thing that they build in Silicon Valley is they build tech. And so since essentially the origins of the contemporary technology industry venture capital has grown up alongside it because that's where the money is. It sounds like venture capitalists then have pretty much fundamentally changed the business landscape in the last 60, 80 years. What they've done is they've definitely created a new source of capital for companies, right? They have supercharged the ability to create new companies and start new companies. If you were to go back to the 1950s or 60s, starting a new company was like a big deal, right? It was like you had to go find the money and you had to convince other people to join you. And it was it was a big, big, risky thing. Most people worked for IBM or they worked for Culep Packard. It was the rebels who go off and start firms nowadays to start a company. All you really need to do is like know how to like put together a PowerPoint deck with four or five slides and promise that you're going to make $5 billion someday. And so you're right venture capital has made it much easier to start new companies. And part because venture capital has gone from being this small little thing to being a huge asset class with billions and billions of dollars to give away every year. You make it sound like it's almost free money. I mean for some companies it is free money, right? At least at first. The problem is that there is no such thing as a free lunch or free money over the long term. And so when you work with venture capitalists, you are definitely giving something up, you're giving up equity. Oftentimes you're giving up control, you're giving up the ability to determine your fate. Now that's sort of shifting in the last couple of years, particularly among these, these sort of high flying entrepreneurs and who seem like they have unicorn dust on them. It traditionally venture capitalists were in charge, right? They were the guys and some gals, but they're mostly guys. They were the guys with the wallets who had the cash so they could call the rules, but what's happened in the last decade in particular, as there's been so much growth, so much economic prosperity is that so much money has flooded into venture capital that they're now desperate to give their money away. And so as empowered entrepreneurs, entrepreneurs can now make demands of venture capitalists so they couldn't make previously they get to pick and choose who they're going to allow to invest in their companies. And as a result, the power dynamic has shifted. What's occurred is that venture capitalists used to be the adults in the room, right? So there is this one early venture capitalist named Tom Perkins, who is a famous venture capitalist who helped build 60 or 70 companies. He's one of the founders of Cliner Perkins, which is one of the best known venture capital firms from the last wave of tech. Perkins would go in and he would actually like get really involved in these companies, right? He would invest in a company he would show up at their offices one day a week and he would hold people's feet to the fire. He would ask them, how much are you spending? Show me your budgets, prove to me that you're making good choices. He brought with stone as good governance to firms. He was really involved in the companies that he funded. This was true of venture capitalists throughout the 60s and 70s and 80s and 90s venture capitalists were the adults in the room. And then this dynamic that I mentioned before when all of a sudden there's so much more venture capital money now suddenly entrepreneurs can start calling the shots. They're in charge because they can say I'm going to let you invest in my company. One of the demands that entrepreneurs had was to say, look, if I'm going to let you invest in my company, I don't want you sticking your nose in here. I don't want you telling me what to do. In fact, I want you to give me enough power so that I have a super voting authority on my board. You can't ring me in even if you want to. And I think many people would argue that has been a change not for the better. Was this the issue at play with with Theranos Elizabeth Holmes managed to raise a lot of money from investors while maintaining a tight grip over her company. And I know the Theranos story very well, like I've never reported on Theranos, but just from reading the coverage what I do know is my understanding is that Elizabeth Holmes and others went to mainstream venture capitalists and that particularly in the biotech space right people who know that space really well people who know the blood technology space particularly well. And so folks started doing their due diligence. They started asking things like, you know, can you give me proof that your technology works. How many peer reviewed published papers do you have about this technology where other scientists are objectively evaluating it and determining whether it lives up to its promise. Those established venture capitalists heard it made them decide not to back this company right the people who backed Theranos are like Rupert Murdoch who knows media really, really well, but as far as I know it doesn't know much about biotech Betsy DeVos right that's even the way she was inherited it from people who started amway up that dordid or sales company. She was a education secretary under Donald Trump. So I don't think that she has a degree in biotech. I don't maybe she's an expert in biotech but I don't as far as I know she isn't. This is that those people were just in a position where they really weren't qualified to do due diligence and they didn't reach out to ask people who knew how to do due diligence on biotech to evaluate this investment before they handed over their money. What if your family was the victim of a home invasion or you woke up in the morgue or you were seriously injured miles from help. What would you do? This is actually happening asks our listeners this very question while we bring you captivating real life stories of trauma and perseverance this is actually happening brings listeners extraordinary true stories from the people who lived them you'll hear stories about conflict turmoil or threats that dramatically alter the course of someone's life each episode is an exploration of the human spirit and how survivors manage to overcome hardship and move on with their lives even thriving afterward. The new season of this is actually happening is available ad free only with one degree plus and if this new season isn't enough you can listen to more than 120 exclusive episodes available only to one degree plus subscribers join one degree plus on Apple podcasts or on the one degree app. Let's investigate perhaps a reason why there's so much money coming into venture capitalism because it should still be an industry of some fundamentals and that is a return on investment. Absolutely. Absolutely. So the reason why so much money has come in is that during various periods venture capital has provided huge returns. Right, the venture capital model is kind of a strange one because if if I'm starting a venture capital firm, I know that I'm going to make let's say 20 investments and I believe going in before I've even hung up my shingle I believe that 18 of those investments are going to go belly up. They're going to declare bankruptcy they're going to fail they're going to something's going to happen they're going to be bad investments but one or two of them one or two of them is going to be successes and they're not just going to be successes they are going to be monster successes right I'm going to put in two million dollars and 10 years later or seven years later my two million dollars is going to be worth a billion dollars and so it's going to make up for all the losses and all the other investments that I made that didn't work out and for a long time. So long time that logic was a pretty good logic because it worked again and again and again right you put a couple of million dollars into Facebook and Facebook becomes the biggest thing on earth. A guy named Masasan runs a big venture capital fund called the vision fund. It makes a series of investments during the first tech boom most of which are terrible most of which go bankrupt when the economy turns but he put a couple of million dollars into a firm named Ali Baba and there's couple of million dollars end up being worth something like 30 or 40 billion dollars by the time Ali Baba becomes a giant. And so that has been the logic for a long time is i'm going to make a bunch of bets most of them aren't going to work out but some of them are and when they do they're going to knock it out of the park. And so as a result a lot of people standing on the sidelines pension funds and down and funds particularly people who listen to a guy named David Swanson who ran the endowment fund at Yale who was very very enthusiastic about alternative investments about private equity and venture capital is a category of private equity. They said look i'm going to start reallocating my money out of stocks because the problem is stocks is it's hard to get an outsized return i'm definitely not going to be putting it into bonds right because interest rates have been low now for over a decade i'm going to put it into venture capital because venture capital seems to be giving me higher returns the problem with every asset class though is that when capital starts flooding in usually returns go down. And that's what's happened with you see it sounds like if when you're chasing the home run like venture capitalists do there's a lot of incentive to not miss you know so you might find yourself in some sort of gambler's fallacy thinking that and pouring good money after bad what what's the danger there. Well exactly as you said I one thing that can happen is that venture capitalists will have put money into a company and they'll be so committed to wanting to see that pay off occur that they'll pour more and more money in but the other thing that's happened is that there has been this theory that has emerged known as blitz scaling. Primarily within the tech industry and it has its roots in some very sound logic i was talking to one venture capitalist need to talk about uber and you said you know we were early investors in uber and as soon as it became clear that uber was going to be success there were 15 uber competitors and so the only way that we could protect our investment in uber was to get uber as big as possible as fast as possible. And the only way to do that was to pour hundreds of millions of dollars into it so it's scale at a break neck pace that's blitz scaling right and it's true one of the things about the internet economy and the economy today is that it is this winner take all economy right there's only one Amazon there's only one uber lift is a little bit of a competitor but even in that case they're smaller and there's only two of them. And so this blitz scaling to get as big as fast as possible requires huge amounts of infusion of capital and that's what the venture capitalist support is there's no way that a company can earn enough money to grow that quickly they need to go to outside investors and venture capitalists are on board so if i've invested five million dollars in this firm and it says we want to become the biggest firm on earth and that we need another 500 million to do that. Then as a venture capitalist it makes sense to me to give them 500 million not only that but if i'm a venture capitalist i just raised a billion dollar fund or a 1.5 billion dollar fund i got to put that money to work because i don't get paid until i put that money out the door so when one of my investments comes to me and says we need 500 million dollars more even though you only gave us five million last time i'm not unhappy to hear that suggestion because i got 500 million burn in a hole in my pocket and if i can invest it in one. And so if you're interested in one company instead of trying to invest it in 10 companies that means less work for me blitz scaling sounds like an attractive strategy if you your certain your company is a winner it makes an instant monopoly in the market niche that this company is operating in but what if the company you're investing in isn't a winner what happens when it's a bad venture but i mean i've never met an entrepreneur who tells me that their company isn't a winner right like if you if you're the company is a winner. Right like if you're the kind of guy who says what kind of guy who says hey you know what i started this company and i don't know maybe it'll work maybe it won't you're not doing well in Silicon Valley you're not even in the office of a venture capitalist you know you've gone to the Y. And so if you're a creator or some other place that's taught you to say the reason i'm starting this company is because it can change the world if we can just sell pieces of chicken faster and more more efficiently then piece will break out all over right that's ingredient number one is to say that you're going to change the world but ingredient number two is to say and by next year we will have 95% of the world eating our chicken nobody ever comes in and says you know this company maybe it'll work maybe it won't they all pretend or maybe even believe that they're building the most successful company on the face of the planet well yeah that's the entrepreneur's pitch and probably the venture capitalist believes it to make the initial investment but after that initial investment has been made and even though the venture capitalist knows that 18 out of 20 of his gambles are going to fail what if all 20 of them do there's got to be incentive to continue propping up what was thought to be the winner yes absolutely absolutely when you're deep into the world when you're deep into a company there's this old saying right if you borrow a million dollars from the bank the bank owns you if you borrow a hundred million dollars from the bank you own the bank and that's exactly what happens is that venture capitalist very often will make one investment and then the entrepreneur will come back and the last for more money and they say nah I don't think you know I don't think you guys have lived up to the promise I don't think you're the winner that I thought you were and they cut them off and that happens a lot and it's usually disastrous for that entrepreneur for that company what it happens the other alternative is that sometimes you invest one million dollars then you invest five million dollars and you invest ten million dollars and they come back to you and they say we need more money now and you're thinking to yourself gosh you know they're not really hitting their marks right they're not really performing the way that I thought but I can't write down 16 million dollar investment at this point the only thing I can do is give them another 20 million dollars and hope that they'll have enough cash to figure it out and become the winner that I hoped they were in the first place this is I mentioned before mosses on a vision fund this is what vision fund has done again and again and again we work as one of the best examples we work seemed like it was sputtering things were falling apart but mosses on a vision fund had invested so much money into we work already that the only thing they could do was give them more money in the hopes that they can turn it around and figure it out because otherwise yes to tell his investors I just lost tens or hundreds of millions of dollars for you tell me how today's VC deals are structured it's probably not just one person anymore these are big firms it's an established business yeah it is a big business but I mean that being said there's usually one person inside a venture capital fund who is responsible for a particular investment right there the they're the person who's kind of leading the investment and then what will happen after that is if it's a big investment like let's say the Charles do Hig venture capital fund is going to put some money into company X and company X wants to raise a hundred million dollars so I become the lead investor and I Charles do Hig I'm the guy inside the fund who's really going to be like running her on this right like I'm in charge of it so I'm doing all the work I'm negotiating all the deals I'm going to go to other venture capital funds and I'm going to say look I'm putting in ten million dollars I'm going to be the lead investor if you want to come in I'm going to create some space for you you can put in five million or you can put in two million or you can put an eight million I'm going to what's known as I'm going to syndicate out this round and I'm going to let other venture capitalists participate with me now the reason why I would do that is because number one a hundred million dollars is a pretty big risk for me to take on my own right I want to spread the risk around but also I know that if I cut you in on this deal somewhere down the road you're going to cut me in on one of your deals and so that way I don't have to look for every single great deal and elbow my way into it I'm going to get invited in by the syndicate that I belong to and at this point there's really just about 10 to 15 venture capital funds that there's hundreds hundreds maybe thousands of venture capital funds in the world but there's only about 10 to 15 of them that do the by far majority of the deals right these are the funds that control the venture capital industry and one of the ways that they preserve that authority is first of all they have a lot of money but second of all they tend to syndicate with each other they work together as a pack in order to determine which company is get in and to sometimes keep up starts out we've mentioned here that the pitch for any aspiring business is that they're going to change the world that it's not just the bottom line it's an aspiration for the betterment of humanity that's the entrepreneur's side but on the venture capital side do they have a mission is it just earn profits or is there something larger at hand I mean even guys who just want to earn profits they never just say I just want to earn profits right the greediest person on the face of the planet will still tell you that they're in it because they really wanted to be mother Teresa it just so happens that they became a billionaire in the process yeah venture capitalists if you talk to them they'll tell you they got into this because they love technology they believe technology will change the world they want to find and encourage the companies of tomorrow that are going to make the world a better place and you know a lot of them are being honest and truthful I have a lot of friends for venture capitalists and they're they're really great people right they believe deeply in what they're doing they're fascinated by new technology they really want to help entrepreneurs reach their potential now at the same time they also don't mind getting insanely rich and the fact that they're able to like you know buy a Gulf Stream in addition to you know cure cancer hey it's a great world some people might look at venture capitalism and see the potential for a troubling system it seems like you've got the syndicate of self dealing billionaires probably more self interested than they let on to be with an overabundance of capital that they need to spend giving bright eye bush detailed entrepreneurs too much control is that a fair criticism you think yeah there's excesses but what you just described is like the recipe for a fantastic economy right like like the whole point of particularly American capitalism is it's supposed to be easy to start new companies and it's supposed to be able easy to walk away when it's not working and start and try something new like yeah it's bad when it gets to concentrate right when there's gatekeepers who start preventing good ideas from getting executed on when people who are clearly crazy and shouldn't be running companies are given a ton of money for bad ideas all of that is distort but excesses are part of capitalism like there's no way to design an economy that does not have excesses in it if it has free enterprise and competition like the system that we have because at this moment in time there is too much money there is too little regulation there's you know basically we've had what 12 13 years now of unchecked growth and so there are these excesses that you can point at and say like this is going off the rails that's all true but the basic system itself is a great system like asking people to take on risk to vote with their dollars on what they think is going to win or lose that's much better than the alternatives which would be the government making bets on who ought to win or lose or being in a situation where there's such little capital that everyone so risk a verse that if I have a great idea I can't get any funding for it and that's happened in the past that still happens right now to some groups right African Americans have a much harder time raising capital and that's disastrous for the economy it's disastrous for those communities it's disastrous for all of us so I don't think you can argue that the system itself is flawed it's just that it has some excesses right now I also want it because I know that you guys are talking about thermos the important thing about thermos is mainstream venture capitalists did not invest in thermos it was individuals who are not professional VCs who gave thermos its money it was these like sort of fringe figures who were rich but weren't in the habit of making bets on companies that supported what happened at thermos like thermos in many ways you can point to is something that's proof that the VCs system actually works because all of the establishment VCs they all passed on thermos you mentioned earlier that there might be a lack of regulation in the venture capital industry what sort of regulations are there and what what are the responsibilities of venture capitalists to the public and to the companies that they invest in so probably the biggest regulation and this isn't just for venture capital this is true for for essentially all kinds of private equity investments right when you're buying security is stock in a company that's not a publicly traded company the first thing is you have to be what's known as a qualified investor which means that you basically have to be rich you have to you have to earn a certain amount of money each year you have to have a certain amount of money and savings excluding the value of your house so basically the government has said unless you're rich to begin with you can't do this kind of investing and the reason why they say that is because they say look if you are rich we assume that you're financially savvy so we're going to let you take more risks now for the venture capitalists assuming that they raise all their money from qualified investors then when a venture capitalist invests in a company oftentimes they ask for in return a board seat right they they join the board of directors and maybe they'll get one or two seats may or maybe they won't get any but if they join the board that's really important because when you're on the board you're the ultimate bosses of that company the board can hire and fire the CEO in most cases the board is where the book stops now there are some rules about what responsibilities you have if you serve on a board the biggest rule is that you have essentially a fiduciary interest to all the shareholders and not just yourself so if for instance I'm on the board of a company and I learn about a takeover offer that would make me personally rich but would screw all the minor investors all the all the employees all the other people who have bought small pieces of stock in this company I have an obligation to say no to that deal to protect the minority investors who are not on the board because I represent the shareholders I don't just represent myself so one of the things that has been a criticism of venture backed companies is that venture capitalists will get on the boards of these companies and they will act in their own self interest rather than the interest of all of the shareholders again we work as the perfect example of this so when we work was blowing up there was a deal that was put on the table that would have paid off all of the board members that would have made all of the big venture capitalists essentially given them a return on their investment and would have screwed all of the minorities shareholders people like the employees who had stock now there are some who would argue and I think this is a very powerful and legitimate argument that the board of directors these venture capitalists who are on the board they should have said no to that deal they should have said look you have to give us a deal that treats everyone well even if it's going to cost me some a little bit of money it'll be better for everyone instead the venture capitalists said yep we love that deal like you know here's my pocket fill it up with cash and for the minority investors sucks to be you so when we contemplate the spectacular explosions of we work in Theranos what would it take to prevent another failure of that scale I don't think that we work in Theranos should have been regulated away right like I don't think that more regulations would have prevented we work in Theranos I think in some respects the system is working but it's not working to the full extent like look Elizabeth Holmes created a fraud she got people who invest in that fraud the people who invested lost all their money and she's on trial to go to jail so it seems like that system is kind of working now there were a lot of other people who were injured unfairly right there's people who got bad test results there's people who were impacted by her fraud and they deserve to be compensated she deserves to be punished for that but the system is trying to do that right we're always going to have frauds and it's good that the people who invested lost all their money they should also be publicly ashamed for doing it in the case of rework there's other victims right unfair victims the employees of we work but again many of the people who invested money lost a lot of their money now some venture capitalists who invested in we work in fact a number of venture capitalists who invested in we work still got rich off of it they still made big profits and I think that there should be opportunities for the minority shareholders and for others to sue and say to venture capitalists you should have been a better job of being the adult in the room you should have been there making sure that things didn't go off the rails that was your obligation and I lost money because you didn't live up to your obligation and I think that you should have to compensate me for that I think that that's fair and so I think that there are ways that we could strengthen civil liabilities and civil law to allow shareholders to sue I think that regulators government regulators should be taking more of an interest and working harder to regulate companies where the board of directors does not seem to be living up to their responsibilities and does not seem to be doing a good job of keeping their eye on the firm but these rules all exist like we don't need new regulations to do this we just need regulators that are willing to do it but what would that look like if if regulators are doing it what would it mean for regulators and prosecutors to get tougher on venture capitalists so there is a feeling among some of the observers of Silicon Valley that we need to see more criminal prosecutions of directors on boards for not upholding their fiduciary duty and one person I was talking to he said look the first time that you see a venture capitalist be put into handcuffs and put into the police car and prosecuted criminally for not being the adult in the room for not living up to their obligation to protect minority shareholders to stop a crazy CEO from doing crazy things the first time one of those guys gets arrested and it's on TV you're going to see a huge change in Silicon Valley you're going to see a huge change across venture capitalists and I think that's right right for a long time regulators have been toothless when it comes to regulating private investments in particular venture capitalists there's been this romance about venture capitalists that are the handmaidens of innovation and I think at some point some regulators going to step up and say actually these guys this is where the buck stops they didn't do their job let's haul them into court and then all of a sudden a bunch of other people are going to start saying I got to pay close retention and make sure that I don't get arrested next Charles dohig thank you so much for speaking with me today thanks for having me on that was my conversation with Charles dohig a Pulitzer Prize winning journalist and the author of the power of having from wondering this is episode four of Theros from American Scanner in our next series we look at one of the greatest heists in the history of the American West in the early 1900s Los Angeles was booming as Americans flock to a paradise where the sun always shown bright but the desert city was quickly running out of water so local leaders hatch a plan to steal the precious resource from their neighbors in the north it was a scheme that could save the city even if it meant starting an armed conflict if you like our show please give us a five star rating and leave a review and be sure to 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