Elizabeth holmes venture capitalism9/27/2023 ![]() This is highly unusual in biotech, where 90% of the work is reviewing a company's data, Chen said, not only to examine the results of experiments, but to determine whether the people behind the company are rigorous scientists. "All of us asked each other, 'Did you see the deal?' But no one could say they had seen a shred of evidence," said Leon Chen, a partner at the Column Group, a San Francisco-based biotech venture capital firm. Tech's defenders say it should have been a red flag that only a limited amount of funding came from traditional venture capital firms - most notably from Draper Fisher Jurvetson, a well-known company that has backed Twitter, Tesla and SpaceX - and that Theranos's board of directors did not draw from tech. The field of biotech investors is relatively small, so Theranos caught everyone's attention for raising hundreds of millions of dollars in funding from big names including Larry Ellison and Rupert Murdoch. That goes for the way Theranos protected its secrets as well. "You gotta dig a little bit beyond the black turtleneck and secrecy." "This is someone who picked up these surface attributes and ignored a lot of what Jobs did right," Cantrill said. Holmes inked deals with Walgreens and Safeway while she graced national magazine covers in her Jobs-like black turtleneck. Theranos rose to prominence behind the facade of its charismatic founder, who promised to revolutionize health care with her blood-testing system. "But when the truth came out that the product not only didn't work but that the entire company was built on an avalanche of deceit and fraud, it was hugely disheartening." Holmes seemed like a rare model trying to change a male-dominated industry, said Amber Atherton, a start-up founder turned angel investor, whose company Zyper was recently acquired by Discord. And while Silicon Valley says it has moved on and become more accountable and responsible, it is also scarred by what she got away with for years. The conviction of Holmes this past Monday of four counts of wire fraud and conspiracy for misleading investors about Theranos's capabilities represents the ultimate reckoning for the brazenness of Silicon Valley that she personified. Theranos has become an instructive "anti-pattern" - a popular term among technologists - of what not to do, said Bryan Cantrill, co-founder and chief technology officer of Oxide Computer Company, a Bay Area tech firm building a new type of server. She also brought tech start-up growth tactics - such as "fake it till you make it" - to the world of patient health, adding pharmaceutical company logos to PowerPoint presentations implying endorsements that had not been approved.īut fellow Silicon Valley entrepreneurs and backers say she represented only the worst of start-up culture. She dropped out of Stanford University, worked constantly, ignored detractors, emulated Steve Jobs, and wanted to change the world with her blood-test innovations. Theranos founder Elizabeth Holmes seemed to embody the profile of an entrepreneur favored by venture capitalists. ![]() Elizabeth Holmes walks into federal court in San Jose, Calif.
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