&gt;Has a misdiagnosis and resulting fall-out actually been tracked down?<p>In the VC system - certainly.<p>When you have startups offering a real service with real profitability struggling to find cash for expansion, while some well-connected placeholder who is incompetent at best and fraudulent at worst ambles in and gets $400m for hype and promises, a &quot;PR shitstorm&quot; is the least of everyone&#x27;s worries.<p>It&#x27;s good that some people weren&#x27;t convinced. But enough people were convinced for $400m to change hands.<p>That&#x27;s really not a good result for a system that likes to pretend it&#x27;s good at making smart choices about funding.