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October 15, 2021

I’ll go ahead and say it: Ozy and Theranos are not the same thing. 

Both companies are facing serious fraud allegations, but the latter blood testing startup put lives on the line by claiming it could screen for diabetes and cancer: One patient for instance said she had been told her cancer had returned when it had not. Ozy on the other hand, a media company, allegedly defrauded its investors by amping up its subscription numbers—a situation that is bad, for sure, but at the very least has not yet put its customers’ health at major risk.

That said, both of these cases do speak to a broader issue at play: Fake-it-til-you-make-it culture within startups.

As part of a wide-ranging interview on his decision to step back from venture capital investing and startup culture, Lightspeed Venture Partners’ Jeremy Liew discussed why he thinks his industry is a bit like Instagram.

While he believes cases of outright fraud are rare and has not personally faced the issue, the investor who is credited as the first investor in Snap says startup founders feel pressure to display themselves in the best light possible—not unlike teen girls on the Facebook-owned social media app.

“It creates significant mental health, stress, and depression among some startup founders because that [rosy picture] is not what’s going on most of the time,” he says. “But [these stories make] founders think “I’m a failure, because I see everyone else is succeeding, so what is going on with me?”

Here’s the excerpt from our conversation

Last question: Quite a few venture capitalists have disowned Theranos’ Elizabeth Holmes story, saying many of her investors aren’t related to the industry. While you didn’t write on Holmes, you did opine on the story of Ozy Media, saying it fell outside of the “acceptable startup space-time-truth continuum.” While each story falls on different parts of the acceptability scale, they both are used as criticism of fake-it-til-you-make-it culture in startups. Do you think disowning Theranos was fair?

So I’ve never met her and don’t know anything about her beyond what I’ve read, so it’s hard for me to opine.

But I do think there is pressure for many entrepreneurs to fake it till they make it, and I think that that is part of the culture in the startup ecosystem. 

How are you doing? “Oh we’re killing it. Everything is awesome. We just raised another round of capital. Business is booming.” You can’t actually answer anything but that because everyone’s expectation is that if you don’t say that, you’re a loser. There is a real pressure. 

It’s almost like Instagram, right? 

And the sad thing is it drives a couple of things. It creates significant mental health, stress, and depression among some startup founders because that [rosy picture] is not what’s going on most of the time. Most startups have a really tough time and in fact even the best ones go through zigs and zags. I’ve been involved in a lot of companies and not one goes continuously up and to the right without running into a problem. But [these stories make] founders think “I’m a failure, because I see everyone else is succeeding, so what is going on with me?”

And then the other thing it perpetuates is people faking it by not just telling people things are great, but faking real data. And that’s where you go from putting on a front to fraud. I don’t know much about Ozy beyond what I’ve read. But I believe if you impersonate a third party, as a reference, that’s pretty freaking bad. That’s not on the gray side, that’s on the wrong side of the line.

Have you personally experienced the latter consequence of the fake it til you make it culture?

I’m lucky that in my personal portfolio, as far as I am aware, I have not run into that problem. We talk about Ozy and Theranos—but then you start to run out of names. So it’s not a widespread thing.

So in your view, while fake-it-til-you-make-it culture is a real issue, instances of crossing the line into fraud are still relatively rare.

It seems to me. I mean I haven’t done the study, right, so I don’t know. But can you name another? I can’t.

Read the full Q&A on the growing size of investment rounds and his decision to step back at Lightspeed here.

Lucinda Shen

Jessica Mathews compiled the IPO and SPAC sections of this newsletter.




- Dutchie, a Bend., Or.-based cannabis pickup and delivery tech company, raised $350 million in Series D funding. Dutchie is now valued at $3.8 billion. D1 Capital Partners led the round and was joined by investors including Tiger Global, Dragoneer, DFJ Growth, Thrive Capital, Gron Ventures, and Casa Verde Capital.

- TradingView, a Westerville, Oh.-based stock trading and charting platform and social network for traders and investors, raised $298 million. Tiger Global led the round valuing it at $3 billion.

- Reliable Robotics, a Mountain View, Calif.-based leader in automated aircraft companies, raised $100 million in Series C funding. Coatue Management led the round and was joined by investors including Lightspeed Venture Partners, Eclipse Ventures, Teamworthy Ventures, and Pathbreaker Ventures.

-  Rectify Pharmaceuticals, a Cambridge, Mass.-based developer of disease-modifying therapeutics that restore ABC transporter function, raised $100 million Series A financing co-led by Atlas Venture, Omega Funds, Forbion, and Longwood Fund. 

- Culture Biosciences, a San Francisco-based cloud biotech, raised $80 million in Series B funding. Northpond Ventures led the round and was joined by investors including Synthesis Capital.

- Universal Hydrogen Co., a Los Angeles-based decarbonize aviation company, raised $62 million. Investors included Mitsubishi HC Capital, Tencent, Stratos, GE Aviation, Waltzing Matilda Aviation, Fourth Realm, Hawktail, Marc Benioff’s TIME Ventures, Jeff Wilke, and Spencer Rascoff’s 75 and Sunny Ventures

- Clarifai, a Delaware-based A.I. cleaning startup, raised $60 million in Series C funding. NEA led the round and was joined by investors including Menlo Ventures, Union Square Ventures, Lux Capital, LDV Capital, Corazon Capital, and NYU Innovation Venture Fund.

- Alto Neuroscience, a California-based neuroscience startup, raised $40 million in funding. Investors include Apeiron Investment Group

- AiDash, a Santa Clara, Calif.-based A.I. company, raised $27 million in Series B funding. G2 Venture Partners led the round and was joined by investors including BGV and National Grid Partners.

- Rose Rocket, a Toronto-based transportation management software company, raised $25 million. Investors include Lee Fixel of Addition Capital and Mo Koyfman of Shine Capital with participation from Ripple Ventures, Scale-Up Ventures, Kevin Mahaffey, Funders Club and Y-Combinator. 

- StudySmarter, an edtech, raised $16 million from Goodwater Capital.

- Spacelift, a Polish and U.S-based infrastructure code startup, raised $15 million in Series B funding. Insight Partners led the round.

- SwiftConnect, a Stamford, Conn.-based software platform, raised $9 million. JLL Spark Global Ventures led the round and was joined by investors including JLL, Navitas Capital, World Trade Ventures, Concrete Ventures, Silvertech Ventures, 1414 Ventures, and NetOne

- Pani Energy, a Vancouver-based waste water treatment plant A.I. maker, raised $8 million in a funding round led by Blue Bear Capital and Blue Coast.

- RPA Supervisor, a London-based RPA management company, raised $5 million in a seed round led by MMC Ventures. 

- Breezytai, a U.S. and Korean petcare company, raised $3.5 million in Series A funding. Korea Investment Partners, Premier Partners, KB Investment, Enlight Ventures, and Fast Investment invested.

- Alloy, a New York City-based telehealth company focused on the needs of women over 40, raised $3.3 million in seed funding.  Kairos HQ and PACE Healthcare Capital invested.

- Continuum, a New York City-based hiring marketplace, raised $2.9 million in seed funding. Uncork Capital led the round and was joined by investors including Day One Ventures.


- National Fire & Safety, a portfolio company of Highview Capital, acquired Maxim Fire Systems, a Dallas-based fire sprinkler and life safety systems company. Financial terms weren't disclosed.

- Littlejohn & Co. acquired Pritchard Industries, a New York City-based provider of facility services. Financial terms weren't disclosed.

- Warburg Pincus invested in TRC, a consulting, engineering and construction firm. Financial terms weren't disclosed.

- Global Healthcare Exchange, backed by Temasek and Warburg Pincus, acquired Explorer Surgical, a Chicago-based digital and remote case support business. Financial terms weren't disclosed.

- MSD Partners agreed to invest in West Monroe, a digital consulting firm. Financial terms weren't disclosed.

- Colorcon invested in Ideal Cures, a TA Associates portfolio company and manufacturer of excipients and ready-to-use coating systems.


- Mubadala Capital acquired K-MAC Enterprises, an operator of Taco Bell restaurants in the U.S., from  Lee Equity Partners Opportunities Fund. Financial terms weren't disclosed.


- ironSource (NYSE: IS) agreed to acquire Tapjoy, a mobile advertising and app monetization company. Financial terms weren't disclosed.

- Capital One announced plans to acquire TripleTree, an investment banking advisory firm focused on the healthcare sector. Financial terms weren't disclosed.


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- Coca Cola’s bottling operation in Africa, Coca-Cola Beverages Africa, is seeking a valuation of $8.1 billion in an IPO next year, per Bloomberg.

- Multiply, an Abu Dhabi holding company that invests in tech companies, may go public as soon as this year, according to Reuters. An offering could value the company at up to $2.7 billion. IHC owns the firm.

- Ventyx Biosciences, an Encinitas, Calif.-based inflammatory disease and autoimmune disorder therapy company, plans to raise up to $133 million in an offering of 7.8 million shares priced between $15 and $17 per share. The company reported a net loss of $28 million in 2020 and has yet to post revenue. New Science Ventures, venBio, and Third Point Ventures back the firm.

- Paragon 28, an Englewood, Colo.-based foot and ankle medical device company, raised $125 million in an offering of 7.8 million shares priced at $16 per share. The company reported $111 million in revenue in 2020 and net income of $3 million.

- MiNK Therapeutics, a New York City-based cell therapy treatment company, raised $40 million in an offering of 3.3 million shares priced at $12 per share. The company reported a net loss of $16.2 million in 2020 and didn’t post revenue. Biotechnology company Agenus backs the firm.


- Tempo Automation, a San Francisco-based electronics manufacturer, said it would merge with ACE Convergence Acquisition Corp., a SPAC. As part of the deal, Tempo is also acquiring the outstanding equity of Compass AC Holdings, the parent company of circuit board manufacturer Advanced Circuits, as well as electronics product design and manufacturing company Whizz. The deal is expected to close in the first quarter of 2022.

- ECombustible, a hydrogen-based fuel company, is in talks to merge with Benessere Capital Acquisition Corp., a SPAC, per Bloomberg. A deal could value the combined entity at up to $1 billion.


- D/XYZ, a maker of an ETF that allows investors to bet on private companies, raised $100 million.

- Thomson Reuters raised a $100 million Corporate Venture Capital fund.

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