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The rise and fall of the career of Elizabeth Holmes, founder of Theranos

March 26, 2020

The woman who will go to trial for mass fraud in July 2020.

14 min read

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In 2014, startup Theranos, tasked with conducting blood tests, and its founder, Elizath Holmes, were on top of the world.

Back then, Theranos was a revolutionary idea created by a woman considered by many to be a genius, and she was even referred to as the female version of Steve Jobs. Holmes was the first billionaire woman to have made a fortune for herself, and Theranos one of Silicon Valley's unicorn startups, valued at approximately $ 9 billion.

But soon after, it all fell apart.

Theranos' shortcomings and inaccuracies were exposed, along with the role of Holmes, who was in charge of hiding everything. Holmes was expelled as CEO of the company and accused of “massive fraud”, while Theranos was forced to close its laboratories and work centers.

Despite the possibility that Holmes may spend up to 20 years in prison. The entrepreneur managed to get engaged – and married – to hotel heir Billy Evans, while waiting for her trial to begin.

This is how Holmes went from being a precocious child, to an ambitious young woman who dropped out of Stanford University, to become the founder of a startup accused of fraud:

Elizabeth Holmes was born on February 3, 1984, in Washington DC Her mother, Noel, worked in Congress, and her father, Christian Holmes, worked for Enron, before joining government agencies like USAID.

When Holmes was little his family left Washington DC to move to Houston.

At age 7, Holmes attempted to create his own time machine, filling an entire notebook with detailed engineering drawings. At 9 years old, he told his relatives that he wanted to be a billionaire when he grew up, “he said it with great seriousness and determination,” they recall.

Since she was little Holmes was very competitive. He liked to play Monopoly with his younger brother and cousin, and if she did win, he insisted on finishing the game. But if she was the one who was losing, she abandoned the game.

It was in high school when Holmes developed her work ethic, at this time it was common for her to work late, which led her to become a star student and even start her own business: she sold C ++ compliers, software that translates codes of computing for Chinese schools.

Holmes began taking Mandarin classes, and when she was halfway through high school, she managed to be accepted into the Stanford University summer program, culminating in a trip to Beijing.

Photo: Shutterstock

Inspired by her great-grandfather, surgeon Christian Holmes, Elizabeth said she wanted to study medicine, but her fear of needles forced her to abandon sleep. She later claimed that it was precisely this that led her to found Theranos.

Holmes studied chemical engineering at Stanford University. In her first year she became a school president, an honor that came with a salary of $ 3,000 to be used in a research project.

Holmes spent the summer of her first year working as a fellow at the Genome Institute in Singapore. Mandarin speaking played an important role in his hiring.

In his second year, Holmes went to Channing Robertson, one of his teachers, and said, “Let's start a company.” He gave her his blessing and she founded Real-Time Cures, a company that would later become Theranos. Due to a dedazo, the checks of the first employees said “Real-Time Curses”, which translates as “Curses in Real Time”.

Shortly thereafter, Holmes filled out the patent form for “Medical device for analyte monitoring drug delivery,” a gadget that administers medication, monitors patients' blood, and adjusts the dose required.

Theranos' business model was based on the idea that he could do blood tests using proprietary technology, which only required a finger prick and a small blood sample. Holmes said the tests would be able to detect medical conditions like cancer and high cholesterol levels.

Photo: Jeff Chiu / AP

Holmes began raising funds from investors like Larry Ellison, founder of Oracle and Tim Draper, the father of a childhood friend, and founder of the firm Draper Fisher Jurvetson. Theranos got over $ 700 million to start, and Draper continues to defend Holmes today.

Holmes took the investors 'money on the condition that he could not reveal to them how Theranos' technology worked. Plus, she had the last word on everything about the company.

The obsession with keeping everything a secret played a very important role in Theranos. During the first decade that Holmes spent building his business, Theranos operated cautiously. He even brought three former company employees to court, claiming they had misused his trade secrets.

The way Holmes intended to lead his company was influenced by one of his Silicon Valley heroes – former Apple CEO Steve Jobs. Holmes started using black turtlenecks like Jobs, decorated his office with his favorite furniture, and like Jobs, never took a vacation.

Holmes's peculiar and deep voice is even believed to be part of the image that was created to fit into the predominantly masculine world of business. In ABC's podcast titled “The Dropout,” a former Theranos employee commented that the CEO sometimes fell out of character, especially when she drank, and spoke in a higher voice.

Photo: Justin Sullivan / Getty Images

Holmes was a demanding boss, and she wanted her employees to work as hard as she did. He had his assistant track the arrival and departure of his workers every day. To motivate his employees to work longer, he started having dinners in the office at 8:00 pm.

More information about what was happening inside Theranos was revealed thanks to some videos that leaked and were featured in the HBO documentary “The Inventor: Out of Blood in Silicon Valley.” The 100-plus-hour footage shows Holmes walking in the office, company parties, Holmes and Balwani's speeches, and Holmes dancing MC Hammer's “U Can't Touch This”.

At age 19, shortly after she left Stanford, Holmes began dating Sunni Balwani, president and COO of Theranos, who was 20 years her senior. They met in the third year that Holmes participated in the Stanford Mandarin program, one summer before she started college. When Holmes was bullied by other students, Balwani came to his rescue.

Despite having very little experience, Balwani became Holmes' right hand man in Theranos. He himself was said to be a bully and frequently tracked the steps of his employees. Holmes and Balwani ended their relationship in the spring of 2016, when she removed him from the company.

Sunny Balwani pictured in January 2019. Photo: Justin Sullivan / Getty Images

In 2008, Theranos' board decided to strip Holmes of the CEO position and put in his place someone with more experience. But during a meeting that lasted more than two hours, Holmes managed to convince the members of the council, and remain in charge of his company.

As Theranos wiped out investor money, Holmes became an acclaimed media figure in the tech world. He appeared on the cover of Fortune and Forbes, gave a TED Talk, and participated in panels with Bill Clinton and Jack Ma of Alibaba.

In a short time Theranos began to gain partners. Capital Blue Cross and Cleveland Clinic would offer Theranos testing to their patients, and Walgreens made a deal to open Theranos testing centers in its stores. Theranos also secretly partnered with Safeway for $ 350 million.

In 2011, Holmes hired Christian, his younger brother, even though he had no medical or scientific knowledge. Christian Holmes spent his early days at Theranos reading sports sites and recruiting members of his fraternity at Duke University. People nicknamed Christian and his team as “the Frat Pack” and the “Therabros.”

Elizabeth Holmes and her brother, Christian. Photo: Andrew Harrer / Bloomberg via Getty Images

Holmes became the world's youngest billionaire woman, with an estimated fortune of $ 4.5 billion.

Holmes was obsessed with security at Theranos. He asked everyone who visited the company to sign a confidentiality agreement before entering the building, and he had security guards accompanying visitors everywhere – even to the bathroom.

Holmes hired bodyguards to take her everywhere in a black Audi. His nickname was “Eagle One,” and his office windows were armored.

During that time, questions began to arise about Theranos' technology. Ian Gibbons – chief scientist at Theranos and one of the company's first employees – warned Holmes of flaws in the technology, telling him that the tests were not ready to hit the market. Meanwhile, external scientists expressed doubts and concerns about the method.

In August 2015, the FDA (Food and Drug Administration) began investigating Theranos, and government regulators charged with overseeing laboratories found “serious flaws” in the tests Theranos was conducting on its patients. .

By October 2015, John Carreyrou of the Wall Street Journal published his research on issues in technology from Theranos. With the Carreyrou report, the company's fall began.

Carreyrou discovered that Edison, Theranos' blood-testing machine, was unable to give accurate data, so Theranos was testing on the same machines used by other companies that do blood tests.

Photo: Carlos Osorio / AP

Holmes appeared on CNBC's Mad Money show shortly after the Wall Street Journal published his story. “This is what happens when you work to make a change, first they think you're crazy, then they fight you, and when you least expect it you've changed the world,” said Holmes.

In July 2016, Holmes was banned from entering the laboratory industry for two years. By October Theranos had closed operations at its labs and wellness centers.

In March 2018, Theranos, Holmes, and Balwani were charged with “massive fraud.” Holmes agreed to relinquish financial control of the company, pay a $ 500,000 fine, and return $ 18.9 million in Theranos stock. For the next 10 years, she will not be the director or executive of any open-capital company.

Despite the charges against him, he was allowed to remain as CEO of Theranos, as it was a private company. By then, the company was hanging on by a thread, and Holmes asked investors for more money to save Theranos. “In the situation we find ourselves in, this is not an easy thing to ask for,” he wrote.

Photo: Kimberly White / Getty Images for Fortune

In the last days of Theranos, Holmes adopted a Siberian husky named Balto, whom he brought to the office every day. The cub was untrained and was relieving himself within the company, even during important meetings.

In June 2018, Theranos announced that Holmes would no longer be the CEO of the company. That same day, the Justice Department announced that Holmes and Balwani were accused of fraud and conspiracy.

Theranos emailed investors in September 2018, announcing the closure of the company. Theranos said he would spend the next few months paying off debts to his creditors with what resources he had left.

When all indications were that the end of Theranos was near, Holmes made a public appearance on the side of William “Billy” Evans, a 27-year-old California hotel heir. They are said to have met in 2017, and were first seen together at the Burning Man festival in the Nevada desert.

Holmes is rumored to wear Evans' graduation ring like I said on a chain and the couple have posted several photos professing their love, on a private Instagram account. Evans' decision to marry Holmes is said to have stunned his parents.

The current residence of Holmes and Evans is unknown, but until April 2019 they lived in a San Francisco apartment that they rented for $ 5,000 a month. The apartment was just one block from Lombard Street, one of the main tourist attractions in the city.

Holmes and Evans were later reported to be engaged in early 2019 and married in a secret ceremony in June of the same year. According to Vanity Fair , the former Theranos employees were not invited to the wedding.

Holmes and Balwani will appear in court this year. A California judge ruled that the federal Holmes and Balwani trial should begin in August 2020.

If convicted, Holmes and Balwani could face up to 20 years in prison, and would have to pay a fine of up to $ 2.7 million.

Photo: Justin Silva / Getty, Stephen Lam / Reuters, Business Insider

In addition to this case, Holmes is also involved in several civil lawsuits, including one in Arizona that was brought up by several former Theranos patients. In late 2019, the attorneys in this case said they haven't been paid in over a year, and asked to be removed from Holmes's legal team.