Theranos founder Elizabeth Holmes is reportedly seeking Silicon Valley investors for a new company.
That’s the same Elizabeth Holmes who was recently indicted and charged with committing one of the largest frauds ever in Silicon Valley—one that put people in serious danger. She convinced investors and business partners that she invented a portable blood tester that would revolutionize medical care. She claimed that the tester was able to perform dozens of blood tests with a single drop of blood most anywhere. She raised over a billion dollars from investors, individuals, and even Walgreens.
The problem was she never did any of this. She modified a competitor’s machine that never worked reliably and convinced Walgreens to put them in their stores without ever receiving FDA approval, putting their customers at risk. Blood tests are used to determine the need for medication or even surgery. She lied to investors, her board, and to the FDA.
The story is told in a spellbinding new bestseller, Bad Blood, by John Carreyrou, the reporter for the Wall Street Journal who uncovered the fraud beginning in 2015. Her success was partly a result of the image she conveyed as a brilliant Stanford dropout who was the next Steve Jobs. She was amazingly convincing and attracted investors including ex-politicians, cabinet officers, Rupert Murdoch, and Betsy DeVos, the current secretary of Education.
Carreyrou, in a Vanity Fair interview, when asked if she feels any remorse or wants to apologize. “She has shown zero sign of feeling bad, or expressing sorrow, or admitting wrongdoing, or saying sorry to the patients whose lives she endangered,” he said. He explained that in her mind, according to numerous former Theranos employees he has spoken to, Holmes believes that her entourage of employees led her astray and that the bad guy is actually John Carreyrou. “One person in particular, who left the company recently, says that she has a deeply ingrained sense of martyrdom. She sees herself as sort of a Joan of Arc who is being persecuted,” he said.
While you’d think she’d slink off, out of the limelight, she has not. In fact, Carreyrou said in an interview with Vanity Fair that Holmes is meeting with Silicon Valley investors and asking them to invest in a new company she’s forming. She may just succeed. One of her supporters who invested in the original company, venture capitalist Tim Draper, also claims she was wronged and blames Carreyrou for destroying her business.