The Elizabeth Holmes Trial is Finally Here
5 things to know as the Theranos founder makes her debut in court
“The company dominated news cycles from its inception in 2003 to its epic downfall beginning in 2015. Theranos, the blood-testing startup once valued at $9 billion, fell from grace after allegations came to light that its technology was a fraud.”
This is how I started my 2019 Fraud Magazine cover story about Theranos and Tyler Shultz, the whistleblower who helped uncover the fraud at the Silicon-valley technology company. And now, after delays due to Covid-19 pandemic-related complications and the birth of her first child, Elizabeth Holmes, the former founder and CEO of the now-defunct blood-testing startup, finally made her debut in court.
Like many others I was sucked into the drama of the story as I researched how Theranos fell from grace. Wall Street Journal investigative journalist John Carreyrou tells it best in his book, “Bad Blood: Secrets and Lies in a Silicon Valley Startup” and if you want play-by-play coverage of the trial, he will be detailing the spectacle in his podcast, “Bad Blood: The Final Chapter.”
While I may not have the same insider knowledge that Carreyrou does, I did sit down with Shultz for a couple hours in June 2019 to talk about how he unearthed the fraud at Theranos. I’m just as invested in the outcome of this trial as I would be with any other high-profile murder or fraud trial.
Here is a primer to get you caught up as the trial resumes in federal court in San Jose.
In 2003, Holmes, a 19-year-old former Stanford student, started a blood-testing company called Theranos. After raising more than $900 million from venture capitalists and private investors, Theranos would quickly rise to prominence, resulting in a $9 billion valuation at its peak in 2013 and 2014. Holmes, the company’s CEO, claimed Theranos’ technology would streamline blood-testing at a much lower cost than traditional analyses.
- The blood-testing device: Theranos’ signature blood-testing machine, nicknamed “Edison” after the famous inventor, was designed to pull a few drops of blood via a finger prick stored in what Theranos coined a “nanotainer” — a vast change from the usual multiple test tubes of…