By now, many of us are familiar with the story of Elizabeth Holmes and her late biotech startup, Theranos. And while it’s easy to write the whole story off as the work of a troubled person, the truth is: Theranos, at its inception, had a groundbreaking idea, one that many well-respected people invested millions into.
Theranos’s blood-testing method — which promised to detect a range of illnesses with just a prick — was designed to be as small, compact, and lightning-fast as possible because, the story went, Holmes and her mother were both terrified by needles. The technology — if it had been realized — would have revolutionized the healthcare industry. So it's no surprise that this idea seduced many high-profile investors.
Theranos’s earliest venture capital money came from her family ties. Through one of her father’s college friends, she was introduced to Oracle super-investor Don Lucas, who then brought Oracle founder Larry Ellison on board, according to The New York Times.
Another backer, Tim Draper of venture capital firm Draper Fisher Jurvetson, was Holmes's neighbor growing up. Beyond being one of Theranos's first investors, Draper continues to be one of Holmes's most fervent defenders — even in the wake of such controversy.
According to unsealed documents from several of the lawsuits now brought against Theranos, other investors included Walmart founders the Walton family, who provided $150 million; Rupert Murdoch, who invested $125 million; and education secretary Betsy DeVos and her family, who put $100 million toward the now defunct company. Members of Atlanta's billionaire Cox family, members of a South African diamond dynasty, and Mexican tycoon Carlos Slim also stand to suffer big losses.
While the Theranos debacle is juicy from a bystander standpoint, it’s clearly been financially devastating for those who bought into the hype. According to Greg McNeilly, chief operating officer of Windquest Group, Betsy DeVos and her husband’s holding company, “The investment was made by many members of the DeVos family. To say they’re highly disappointed in Theranos as a company and an investment is an understatement.”
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