This is a valid comment. Theranos' claims for their technology should have been readily verifiable. The reason for this mess is they were given money without asking enough questions. It's actually not even that complicated as having to test the machines yourself, if they had just tried asking a few more questions, it would have become pretty obvious this was a bad investment. There were many smart VCs who kept their money because they did this.
eg see here:
http://www.vanityfair.com/news/2016/05/theranos-silicon-vall...
"When I’ve asked V.C.s why they didn’t pour millions of dollars into a company that appeared to be changing the world, I was told that it wasn’t for lack of trying on Holmes’s part. She met with most top venture firms. But when the V.C.s asked how the technology worked, I was told, Holmes replied that it was too secret to share, even to investors. When they asked if it had been peer-reviewed, she insisted once again it was too secret to share—even to other scientists."
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.
"When I’ve asked V.C.s why they didn’t pour millions of dollars into a company that appeared to be changing the world, I was told that it wasn’t for lack of trying on Holmes’s part. She met with most top venture firms. But when the V.C.s asked how the technology worked, I was told, Holmes replied that it was too secret to share, even to investors. When they asked if it had been peer-reviewed, she insisted once again it was too secret to share—even to other scientists."