Elizabeth Holmes is a 37-year-old American businesswoman who was the founder and former CEO of Theranos, a now-defunct healthcare company.
With Theranos, Holmes became one of the youngest and wealthiest female Billionaires in 2015. What happened to the company’s billion-dollar valuation? Why did Theranos fall down?
We have all the details down below.
How Elizabeth Holmes Went From Youngest Self-made Billionaire to World’s Most Disappointing Leaders
In 2015, Holmes became the youngest and wealthiest self-made female billionaire when Forbes accumulated her company to be worth $9 billion. However, within a year, Forbes revised the company’s worth to zero dollars after revelations of potential fraud about its claims.
Shortly after that, Fortune named Elizabeth the World’s Most Disappointing Leaders. As per Homes, her blood-testing technology was to change the world; however, things changed quickly, and she is facing 20 years in prison for fraud.
In 2017, the State of Arizona filed a lawsuit against Theranos, alleging that the company reportedly sold 1.5 million blood tests to Arizonans while concealing or misleading the important facts about the test.
The company settled the lawsuit in April 2017 by agreeing to refund the cost of the tests to Arizonians and pay $225,000 in civil fines and attorney fees.
Likewise, following the collapse of her company, Elizabeth agreed to pay $500,000 fine to resolve a civil case that was brought by the federal securities.
The Founding And Collapse Of Theranos
Elizabeth Holmes founded the company Real-Time Cures in Palo Alto, California. Although Holmes’ idea was not getting a positive response from her professors, she succeeded in getting her dean and advisor to back up her idea.
In April 2004, she incorporated the company as Theranos and rented the basement of a group college house. She hired her first employee and rented lab space. By December 2004, she raised $6 million to fund the firm.
Likewise, by the end of 2010, her company had over $92 million in venture capital. Until September 2013, she operated the company in stealth mode without press releases or a company website.
She went on to appear on the covers of Forbes, T: The New York Times Style Magazine, Inc, and Fortune. Forbes listed her as the world’s youngest self-made female billionaire and ranked her #110 on the Forbes 400 in 2014.
However, Theranos’ spectacular rise brought a greater downfall. John Carreyrou of The Wall Street Journal began a secret month-long investigation of Theranos after he got a hint about the blood testing device that seemed suspicious.
Elizabeth and her lawyer David Boies imposed a legal and financial threat against the Journal and the whistleblowers. Despite the legal threats, Boies published a bombshell article about the blood testing device by Theranos gave inaccurate results, and the company used commercially available machines for most testing.
The charges of fraud included the company’s false claim that its technology was being used by the U.S. Department of Defense in combat situations. The company also denied the $100 million revenue stream in 2014.
During its height, the company had over 800 employees; however, in October 2016, they fired 340 staff and an additional 155 employees in January 2017. By 5th September 2018, Theranos announced the process of formally dissolving and distributing the remaining cash and assets to its creditors.
Where Is Elizabeth Holmes Now?
The founder and former CEO of Theranos, reportedly reside in San Francisco with her husband William “Billy” Evans, who is the heir to the Evans Hotel Group.
As of 2016, Elizabeth was estimated to own a net worth of $4.5 billion, according to Forbes. However, her net worth is accumulated to be zero dollars in the paper as of 2020.