![]() ![]() One day in July 2004, according to "Bad Blood" by Wall Street Journal reporter John Carreyrou, Holmes got tense and abruptly ended a pitch meeting when MedVenture partners asked how her technology differed from another product already on the market.Īll these years later, it's clear that the Theranos debacle has been a comeuppance for some of Silicon Valley's biggest investors, among them Series A investor Draper Fisher Jurvetson. One team that took a pass at the early stage was MedVenture Associates, a firm specializing in medtech deals. ![]() The venture industry's biggest medtech-focused firms never became Theranos investors. Other firms are no longer in business for various reasons, such as early investors Jupiter Partners, ATA Ventures and Tako Ventures. Some Theranos backers, like Adit Ventures and Draper Fisher Jurvetson, found continued success through a series of winning tech investments-but all of those were spread across non-medical categories. And only healthcare-focused hedge fund Partner Fund Management and Draper Associates subsequently stepped up their bets on healthcare devices. PitchBook data shows that just a few of the VC firms backing Theranos have gone on to fund medtech startups in the years since late 2015, when the company began to implode. So where are those investors now? And what strategy or funding style have they deployed in the aftermath of the Theranos scandal? Their vantage points and their ability to understand the risks of their bets will be picked apart. While Holmes is the current target of the prosecution, the trial figures to shine a light on the people who piled onto the Theranos cap table and cheered on Holmes. The list of potential witnesses in the Holmes case numbers more than 200 people, including famous Theranos backers like Henry Kissinger, Rupert Murdoch and James Mattis. ![]() Balwani will be tried separately later on. Part of their deliberations will be about how transparent Holmes was in financial projections and on the struggles of its signature device, Edison. Whether Holmes is guilty will be up to a jury of five women and seven men. This article appeared as part of The Weekend Pitch newsletter. Her lawyer responded in court that she didn't set out to deceive people-rather that she mistakenly believed the testing device would succeed, and that her "failure is not a crime." Prosecutors say Holmes hoodwinked investors into funding her failing technology with an estimated $800 million-plus. Theranos dissolved in 2018, the same year Holmes and her former business and romantic partner Sunny Balwani were indicted. Opening arguments in the Holmes trial, which is expected to last at least a few months, suggest that much of the evidence will center on the risk investors agreed to take and whether Holmes fooled them into enabling a scandal of historic significance. In federal court, lawyers for the US government have begun pressing fraud charges against Elizabeth Holmes, founder of Theranos, the failed blood-test startup that for many symbolizes the danger of funding bold dreams without proper due diligence and board oversight. Silicon Valley's go-go venture capital system has gone on trial in a packed, fifth-floor courtroom in downtown San Jose. ![]()
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