Monday, June 6, 2016

How did Investment Experts and Healthcare Thought Leaders Get Snookered by Theranos?

One year ago, Elizabeth Holmes of Theranos made a key note address at the 2015 AHIP Institute conference in Nashville. At that time, Theranos had a valuation of $9 BILLION dollars and a pretty CEO at the top of Forbes' list of richest self-made women in America.” An apparently popular financial 'investment' blowhard called her “The Next Steve Jobs” while other in the media couldn’t rattle on too much about her tight, black turtleneck - which may have explained Holmes somewhat gravely, surfer girl voice. The startup's board of directors was comprised of a veritable Who’s Who of government, industry and political luminaries; and you couldn’t go a day without reading a glowing article, hearing over the top praise or seeing something very flattering about Elizabeth Holmes and her amazing Theranos in the financial, medical and even popular press.

From Hero to Zero in Less Than a Year!

And now, less than a year later and before the 2016 AHIP Institute kicks off in Las Vegas, NV next week, Theranos has disintegrated amid allegations of fraud, breach of contract, and false advertising, among other claims. Elizabeth Holmes $4.5B fortune has fallen to $0, members of the board of directors are fleeing and you’d be challenged to find even a bit of hope for Theranos in any of the media who previously carried the startup's water jug.

What Say You, Healthcare Investment Experts?

I’d like to hear from the healthcare investment and innovation ‘thought leaders’ and ‘experts’ attending the 2016 AHIP Institute about their take on the Theranos debacle:

1. What is the most important lesson learned from the Theranos debacle about start-up investing in the healthcare space?

2. What type of due diligence (apparently missed or glossed over) may have made you think twice about investing?

3. What level of responsibility should the board of directors have?

4. What responsibility do those who ultimately make the decision to invest in a start-up company have to their passive investors?

What other Theranos’ are out there?

It's been said that "The Theranos Scandal is Just the Beginning." I have strong thoughts about a few other startups in the healthcare space that may eventually end up like Theranos. While I’ve recently shared about two of these "healthcare saviors," I’ll keep my thoughts on them to myself for the time being. 

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