There has to be a lot of really dumb people at venture capital companies if it turns out magic leap has no real tech. Which, given the Theranos debacle, is very possible.
It's all about who's on their board and who they've raised money from. If they have relevant industry expertise on their board and have raised money from smart investors like sequoia they probably have real tech. If they have bunch of dumb money and people who bring nothing technical to the board they're more likely to be another Theranos. Not having medical and science expertise and raising dumb money was part of Theranos' problem.
Having said that Magic Leap's investors are Google, Andreessen Horowitz and Qualcom. The board is comprised of Google's CEO and Qualcom's executive chairman.
They have 'real tech' - the issue is how marketable and productizable it is.
This is an old, old issue in tech investing.
Sometimes companies have amazing demos - but the ability to make a product is limited, or the market potential is limited.
That this money is coming from far-away, is not a good sign. If they were truly hot, then the 'good firms' would be lining up. I loathe to use the term 'dumb money' but there is a lot of it flooding into the US as of late - a similar thing was happening during the 2000 bubble, but this might be more sustainable as before it was regular money from overseas, or from big-boston firms - but now - the money coming in from Asia is sustainable. All that money we send for cheap stuff has to come back and find a home somewhere.
And 'dumb' is a relative/unfair term as well - for some investors, it makes much more sense to take on higher risk than others as their personal needs and opportunity are different. If you have $1B sitting in a fund and nowhere to put it, and your local government can come along and snatch it up at any time either through currency dilution or appropriation - well - all of a sudden a slightly-risky investment in Magic Leap makes much more sense than it would to say, Anderseen Horowitz.
VC investors are just as human as you and me. Manipulating people into parting with their social-economic power is essentially a solved problem. What Magic Leap says their gonna sell isn't.
