In Washington, D.C., in the United States, Elizabeth Anne Holmes was born on February 3, 1984. She is an entrepreneur most known for being the founder and former CEO of Theranos, a business that garnered attention for making inflated promises about the creation of innovative blood tests that could identify various ailments with just a small amount of blood.
Founder and former CEO of Theranos is Elizabeth Holmes. In 2014, Holmes was the world’s youngest female self-made billionaire with a net worth of $4.5 billion, and Theranos was a billion-dollar business.
One of the unicorn firms in Silicon Valley, Theranos, rose to prominence as a result of Holmes’ fabrications. The most divisive individuals in Silicon Valley right now include Elizabeth Holmes.
Four of the eleven fraud accusations against her were found to be criminal in nature. She now faces a maximum sentence of 80 years in federal prison, with 20 years for each act of fraud.
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Who Is Elizabeth Holmes?
Her paternal great, great, great grandpa founded Fleischmann’s Yeast, which transformed the bread industry in America, and Holmes was born in 1984 in Washington, DC, into a wealthy family. Because of the greatness of her family lineage, she had aspiration from a young age.
She conceived the concept for a patch that could monitor the wearer for infections and dispense antibiotics as necessary while she was studying chemistry at Stanford University in 2002.
When she was 19 years old, she started what would become Theranos with the goal of “democratizing healthcare”. She persisted despite being advised that her innovation, a tool that could diagnose a number of illnesses with just a few drops of blood from a finger prick, would not be successful.
Ramesh “Sunny” Balwani, the former COO of Theranos, and Holmes allegedly began an intimate relationship in 2005, according to information that is readily available to the public.
Nine counts of wire fraud and two counts of conspiracy to commit wire fraud are being investigated against both of them, and neither has entered a plea.
A movie titled “Bad Blood” is also being made about them, based on John Carreyrou’s book “Bad Blood: Secrets and Lies at a Silicon Valley Startup.”
Her introduction to venture capitalists was made possible thanks to Channing Robertson, the Stanford School of Engineering Dean. Henry Kissinger, George Shultz, and General James Mattis were all on the board of directors that Holmes threw together.
Theranos had raised $400 million in venture money by 2014, and Forbes valued the company at $9 billion. Among the investors were Walmart’s owners, the Walton family, and media tycoon Rupert Murdoch.
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What Was Theranos?
It turns out that the concept was deceptively straightforward. Holmes desired to construct a miniature blood laboratory. Simply prick your finger and place the blood sample into one of Theranos’ brilliant “Edison” boxes, which the company promised, one day, will be in “every home in America,” to obtain a test instead of going to the doctor and waiting days and days for the results.
You wouldn’t even need to see a needle, much less a doctor. The idea promised earlier disease detection by removing the anxiety, hassle, and waiting period associated with preventative treatment.
As Holmes herself stated, her dream was for no one to have to say goodbye to the ones they care about too soon. After all, it was her uncle’s untimely and, in her opinion, avoidable death that served as the company’s impetus.
All of that would change with Theranos, and she questioned whether there was a bigger purpose. And therein lies the problem. Because Theranos claimed to be able to perform medical miracles, everyone, from patients and presidents to millionaire investors, wanted to believe in them.
The Rise Of Theranos
One of the inspirations behind Holmes’ creation of the business was his fear of needles. He had the idea that large amounts of data may be extracted from a few blood clots on the tip of a finger.
She was able to persuade someone to join the company’s board, which gave her the opportunity to sell her idea to venture investors despite the fact that many of her teachers thought it would be challenging.
Theranos began receiving payments from pharmaceutical companies to conduct tests as soon as she was able to acquire $6 million for the company in 2004. In 2010, when her company received $92 million in venture capital, she met George Shultz, the later-joined board member and former secretary of state.
In the three years that followed, Theranos advanced to hold the title of company with the most illustrious board in US corporate history. The firm was managed to avoid media attention up until 2013, when they revealed a partnership with Walgreens to set up in-store blood sample collection facilities.
The following year, she appeared on numerous magazine covers, including those for Fortune, Forbes, The New York Times, etc. The youngest self-made female billionaire in history, she had collected $9 billion at that point, garnered more than $400 million in venture capital, and had her name on more than 80 foreign patents.
The Fall Of Theranos
In 2015, The Wall Street Journal suggested that one of Theranos’ blood testing devices would prove to be inaccurate, although Elizabeth quickly denied the claims.
The following year, the Centers for Medicare and Medicaid Services (CMS) sent the business a warning letter after discovering the California lab had numerous problems. Elizabeth publicly stated that these issues should have been found far earlier when CMS proceeded to propose a two-year ban on the firm.
In 2016, the CMS imposed a two-year ban on her owning, managing, and supervising blood testing businesses, and Walgreens severed its relationship with Theranos concurrently.
She vehemently denied any wrongdoing while civil and criminal investigations were started by the US Securities and Exchange Commission, the FBI, and the US Attorney’s Office for the Northern District of California.
In 2018, it was discovered that the business had exaggerated how the US Department of Defense had used its technology and that, in 2014, it had claimed revenue of $100,000 rather than the actual $100 million.
She was sentenced to a $500,000 fine and given a 10-year ban on holding any executive positions in publicly traded companies. Less than two dozen workers, or a minuscule portion of Theranos’ former 800-person workforce, are still employed. Other allegations are still pending, but considering that Holmes is bankrupt right now, it’s unclear what effect they will have.
What Was Elizabeth Holmes Crime?
Following an investigation by Wall Street Journal reporter John Carreyrou in 2015, everything started to fall apart. After getting a tip from a whistleblower, he began investigating the company covertly.
His “bombshell” piece was published despite strong-arm measures to suppress his findings that included threatening him, the whistleblower, and the newspaper with legal action.
After Holmes was given a two-year suspension from owning or running a licenced clinical laboratory and from owning, managing, or overseeing a blood-testing service by CMS officials in 2016, issues for the business swiftly started to rise. A shareholder uprising the next year was followed by legal action taken by the state of Arizona.
The SEC accused her and Ramesh Balwani, the former CEO of Theranos, of fraud in 2018. The business allegedly defrauded investors out of nearly $700 million, according to financial officials.
She was barred from serving as an officer or director in a public business for ten years as part of the settlement agreement. Holmes and Balwani were charged with many counts of wire fraud and conspiracy to commit wire fraud by the US District Court for the Northern District of California the same year.
In 2022, they were both found guilty. Balwani was found guilty on twelve counts connected to the fraud, as opposed to four of eleven counts for Holmes. On November 18, the Theranos founder is due in San Jose, California, federal court for sentencing.
She could spend up to 20 years in jail for each count, but her attorneys are pleading for leniency and asking that she only serve at most 18 months. The defence has requested that the judge sentence the disgraced former CEO to 15 years in jail. On December 7, Balwani will receive his punishment.
Conclusion:
Holmes was born in 1984 in Washington, DC, into a wealthy family; her paternal great, great, great grandpa founded Fleischmann’s Yeast, which transformed the bread industry in the United States. Her early ambition has been attributed to upholding the greatness of her family.
She developed the concept for a patch that could check the wearer for diseases and release medications when necessary while attending Stanford University to study chemistry in 2002. At the age of 19, she established Theranos with the goal of “democratising healthcare.”
She persisted despite being informed that her innovation, a tool that could identify a number of diseases with just a few drops of blood from a finger prick, would not function. She was introduced to venture capitalists by Stanford School of Engineering Dean Channing Robertson.
Holmes put together a board of directors that was made up of influential people including General James Mattis, Henry Kissinger, and George Shultz. According to Forbes, Theranos was worth $9 billion in 2014 and had garnered $400 million in venture funding. Rupert Murdoch, the head of the media, and the Walton family, who run Walmart, were among the investors.
Elizabeth Holmes, who was 30 at the time, was king of the world in 2014. She was a Stanford University dropout who established a $9 billion (£6.5 billion) company that she claimed would revolutionise disease diagnosis.
Theranos asserted that its Edison test, which only required a few drops of blood, could instantly identify diseases like diabetes and cancer without the inconvenience of using needles. James Mattis, a general, and Henry Kissinger were among the prominent figures seated at the table.
But by 2015, the cracks were beginning to show, and within a year, Holmes had been revealed to be a fraud. The technology she praised didn’t function at all, and by 2018, the business she formed had failed.
She was found guilty in January on four charges of fraud in California, each of which carries a potential penalty of 20 years in prison. Four additional accusations were dropped against her, and the jury was unable to make a decision on three additional offences. Holmes, who had pled not guilty to all charges, requested a new trial, but those pleas were turned down. She was given an 11-year, 3-month prison term on Friday.
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