She was hailed as a visionary, a tech genius, and the youngest self-made female billionaire in the world. She had achieved remarkable success with her revolutionary blood-testing startup Theranos and was widely admired as a role model for young entrepreneurs.
But then, things started to unravel. Investigations revealed that Holmes had committed massive fraud, exaggerating the capabilities of her technology and bilking investors out of hundreds of millions of dollars. The company imploded, and Holmes was charged with numerous criminal counts related to her actions.
It was a shocking downfall for one of Silicon Valley’s biggest stars, but why did it happen? In this article, we’ll explore the rise and fall of Elizabeth Holmes, from an inspiring success story to an incomplete tragedy.
Elizabeth Holmes Founded Theranos as a Stanford Dropout
Elizabeth Holmes was a 19-year-old junior at Stanford and a former Girl Scout when she discovered her big idea. A passionate believer in the power of technology to improve healthcare, she dropped out of Stanford in 2003 and founded her startup, Theranos.
Holmes saw the potential for a disruptive technology that would revolutionize healthcare industry by making it easier and more affordable for people to access medical tests. She aimed to deliver accurate diagnostics from a single drop of blood, rather than the vials traditionally required.
The bold idea earned her the attention of leading venture capitalists, including Oracle co-founder Larry Ellison who invested millions into the promising startup. In 2014, Holmes made history as the world’s youngest female self-made billionaire – a feat that landed her on the covers of major magazines such as Fortune and Forbes and cemented her place in Silicon Valley.
Theranos Promised Revolutionize Blood Testing
When Elizabeth Holmes founded Theranos in 2003, she promised to revolutionize the industry of laboratory blood testing. Holmes claimed that she had developed a new technology, the proprietary Edison machine, that could perform hundreds of tests from a single drop of blood—all from a pinprick.
This revolutionary concept would make blood tests cheaper, faster and more accurate than ever before. It was no surprise that many investors and high-profile figures jumped on board, pouring money into the company. They believed Holmes’s revolutionary vision would be the future of health care for decades to come.
Little did they know that what looked like a golden opportunity was actually a sinking ship. In 2018 it was revealed that Theranos’ Edison machines weren’t as accurate or efficient as Holmes had promised and much of their funding had been used for marketing and advertising instead of research and development.
It was a shocking turnaround of fortunes and one that left people wondering how they’d been so deceived by such an ambitious young entrepreneur—and if there would ever be another like her again.
Elizabeth Holmes Became the World’s Youngest Female Billionaire
Elizabeth Holmes was well on her way to becoming the world’s youngest female billionaire. She had success at a young age, as she dropped out of college at 19 to start her own company, Theranos. She had raised billions in venture capital and became the talk of Silicon Valley.
Quick to capitalize on her success, Holmes leveraged her rising star status to gain recognition on the global stage:
- Giving a TED Talk in 2015 with the title “How We Will Change Health Care”
- Being named one of Fortune’s Most Powerful Women in Technology
- Being featured on numerous magazine covers, including Forbes and Inc.
- Being honored by President Barack Obama for her considerable achievements as an entrepreneur
Holmes was even awarded patents for inventions related to blood testing and became a true Silicon Valley icon – one who seemed poised for greater successes that many could only dream about.
The SEC Charged Elizabeth Holmes With ‘Massive Fraud’
It’s estimated that Elizabeth Holmes and the company she founded, Theranos, raised more than $700 million before it all came crashing down. And the Securities and Exchange Commission (SEC) was not going to let her get away with it.
The SEC charged her with a “massive fraud” in 2018 for allegedly defrauding investors through false claims about the capabilities of microfluidic chips, as well as its revenue and operations. The charges included “massive fraud” and violations of anti-fraud provisions of federal securities laws.
The SEC charged Holmes and former Theranos President Ramesh Balwani with orchestrating a “multi-million dollar scheme to defraud investors.” The civil penalty was estimated to be up to $700 million. The criminal penalty could have been up to 20 years in prison per charge.
When faced with the SEC investigation. Holmes agreed to settle charges against her by paying a $500,000 penalty, returning millions of shares in stock. Relinquishing voting control of Theranos. Abeing barred from serving as an officer or director of any public company for 10 years.
Where Is Elizabeth Holmes Now?
The downfall of Elizabeth Holmes brought with it a number of questions about her future. Where is she now?
The answer is not clear yet. But what is known is that she is still facing the consequences of her actions. She has been indicted on two counts of federal fraud and nine counts of wire fraud. And if convict faces up to 20 years in prison for each count.
On top of that, she’s been banned from serving as an officer. Or director in any publicly-traded company for a decade and has had to pay millions in fines and settlements. She’s also been permanently barred from owning or operating a health care business in the state of California.
Despite having had to sell off all her company assets. Holmes was able to pay her legal fees and still have plenty left over. It has been reported that she has purchased several million dollar homes while awaiting trial.
It remains to be seen what will happen to Elizabeth Holmes when her case goes to court later this year. But it’s clear that her meteoric rise was followed by a spectacular fall–one with lasting repercussions both professionally and personally.