Theranos’ Holmes is criminally convicted, a rare fate for a tech exec, while biotech heats up

Get the jury some takeout... After a whopping 50 hours of deliberations, jurors found Theranos founder Elizabeth Holmes guilty on 4 of 11 charges in her criminal trial. The 37-year-old was convicted of three fraud counts against investors in her disgraced blood-testing startup, and one count of conspiracy to commit fraud.

• Investor-focused verdict: Holmes was acquitted on four separate counts that alleged she defrauded patients who paid for Theranos' misleading tests.
• Holmes faces up to 20 years in prison for each count when sentenced, though it's unlikely she'll get the max sentence of 80 years. Still, it’s unusual for a Silicon Valley exec to actually go to prison.

Bad blood money... Theranos claimed that with just a few finger pricks of blood its tests could detect health conditions from cancer to high cholesterol. Holmes raised $900M+ from investors, growing the company to a $9B valuation and becoming the youngest female self-made billionaire on paper. Holmes was convicted for lying to investors about the accuracy of Theranos' machines. And still…

• Biotech funding = undented. Despite the cautionary tale, funding for private US biotech companies has nearly 3X'd since 2015 to $27.2B (and boomed since Covid).
• The regulatory gap that allowed Theranos to sell its tests hasn’t been closed, and other companies have used it to roll out unapproved diagnostic tests to patients.