The California court sentenced Elizabeth Holmes, the founder of Theranos, which promised a revolutionary technology in the blood testing industry, to 11 years in prison. This is after Holmes was convicted last January on four charges in the criminal trial that was conducted against her, in what is considered one of the largest white collar trials of the period.
Holmes was convicted of one count of intent to defraud and three counts of defrauding specific investors. Holmes was acquitted on four additional counts, and jurors were unable to reach a decision on three additional counts. She is expected to face a new trial on these counts.
● Elizabeth Holmes, “the entrepreneur who duped the world”, was convicted of fraud
● After the conviction of Elizabeth Holmes, venture capitalists distance themselves from Theranos
Holmes founded Theranos after dropping out of Stanford University in her sophomore year. She built the company for nearly 12 years, before a series of articles by the “Wall Street Journal” that began in 2015 revealed problems with the company’s finger-prick blood test technology. These articles later precipitated regulatory action, criminal charges – and finally in 2018 the collapse of the company.
Holmes managed to raise $945 million from high-profile investors, and at its peak Theranos was worth about $9 billion.
During its years of operation, the company provided inaccurate blood test results to patients who were wrongly told they might have AIDS or prostate cancer or informed pregnant women that they were likely to miscarry, according to court testimony. The company lost most of the $945 million it raised from investors during its liquidation in 2018, when it was subject to regulatory sanctions and in the midst of criminal and civil investigations into the company’s conduct.
Venture capitalists backing Holmes, court records say, included Draper Fisher Yorbetson (company founder Tim Draper was a family friend); Donald Lucas, a veteran Silicon Valley investor, as well as his son’s venture capital firm; Black Diamond Ventures, a Southern California company run by Lucas’ nephew, Chris Lucas; Oracle Corp, co-founder Larry Ellison’s venture capital fund; Reid Dennis, founder of Institutional Venture Partners and venture capitalist since the 1950s; the defunct Silicon Valley company ATA Ventures; and Peer Venture Partners, which currently invests in crypto startups.