Key takeaways:
- Elizabeth Holmes was sentenced to 11 years in prison for defrauding investors of millions of dollars.
- Theranos was founded in 2003 with the promise of diagnosing medical conditions with a pinprick of blood, but the technology was never able to live up to its promise.
- Holmes’ conviction and sentencing serve as a reminder of the consequences of fraud and the importance of due diligence when investing in a company.
Elizabeth Holmes, the founder of the now-defunct blood-testing lab Theranos, arrived to a Texas prison Tuesday to begin her 11-year sentence for defrauding investors of millions of dollars.
Holmes, 39, was found guilty of four counts of wire fraud in January 2022 and was sentenced in November to 135 months in federal prison on four counts of investor fraud and conspiracy.
The saga of Theranos began in 2003, when Holmes dropped out of Stanford University at age 19 to start a company whose technology she hoped could diagnose a multitude of medical conditions with just a pinprick of blood.
Theranos attracted investments from high-profile moguls, including Rupert Murdoch, the Walton family (heirs to the Walmart fortune), and Oracle co-founder Larry Ellison. Holmes was able to raise more than $700 million in venture capital funding for the company.
However, the company’s technology was never able to live up to its promise and was eventually exposed as a fraud. Holmes was arrested in March 2019 and has since had two children with her partner William “Billy” Evans.
Holmes’ conviction and sentencing are a reminder of the consequences of fraud and the importance of due diligence when investing in a company. It also serves as a cautionary tale for entrepreneurs who may be tempted to make false promises in order to attract investors.
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