 Elizabeth Holmes built her entire Theranos empire around a product that was supposed to solve one of the biggest hurdles in healthcare, access to affordable blood testing. With her revolutionary Edison machine, a single drop of blood would be able to run up to 240 tests from albumin to white blood cell count and everything in between. It was going to change healthcare as we knew it. Our work is in the belief that access to health information is a basic human right. By 2015, Forbes named Holmes the youngest and wealthiest self-made billionaire in the US. Until we put Elizabeth on our cover just a few months back, I hadn't heard of you, I hadn't heard of the company, and yet your company is valued at over $9 billion. But there was a catch. Behind closed doors, the Edison machine simply didn't work nearly as well as promised. And Theranos was essentially a sham. But with hundreds of millions of dollars in funding, Theranos allegedly continued to persuade investors into believing in their cause. And the investments kept coming. Venture capital funded companies are nothing new for Silicon Valley. In many ways, investors have become one of the most important parts of the entire startup ecosystem. When I'm an investor in a startup, I assume that 60% of them are going to go out of business. The question is, why did investors embrace a startup like Theranos, which built its entire empire around a product that didn't work? And now, with Elizabeth Holmes on trial for allegedly lying to them, why do so few of them seem mad about it? There is a great technology and it's going to happen and she will have had a huge hand in making that happen. Having grand ambitions isn't a crime. Holmes often presents some pretty wild ideas. So this will enable the creation of a lunar base. But if a company allegedly uses deceptive practices in order to raise hundreds of millions of dollars, well, that's a different story. And why Elizabeth Holmes is on trial for numerous charges related to wire fraud. It's very rare that we see the CEO of a company facing criminal charges, much less the founder of a startup. Russell Brandom is policy editor at The Verge. He's been following the Holmes trial since the beginning. A lot of the charges here are wire fraud because they wired the money. So if they had mailed cash, it would be mail fraud. Most of them are wire fraud against investors. Allegedly she said things that weren't true. And then based on those lies, she was raising money and that's fraud. In 2015, the Wall Street Journal published a slew of articles revealing multiple levels of deceptive practices. Theranos allegedly covered up these practices while continuing to coax money from wealthy investors. And the list is impressive. Media mogul Rupert Murdoch, General Jim Mattis, who also served on the Theranos board, and even the Walton family. You know, the richest family in the world. So because of that culture of venture capital, investors always, always defend their companies. And you see even after a lot of the reporting has come out saying, look, these machines are not working. Something doesn't smell right here. A lot of investors were still defending Elizabeth Holmes saying, oh, she's the next Steve Jobs. You're just trying to take down a sort of visionary founder. Are you willing to admit that you were wrong about this one? Absolutely not. I feel that we have taken down another great icon. I think really it's just they want to give everything as much runway as possible. And they figure, look, either things will work out and then I'll get rich and look like a genius or it won't and it's not really my problem. For most of the Theranos investors, the amount of money lost pales in comparison to their net worth. And while some were able to claw back their investment, many simply lost it all. You know, is the victim here Rupert Murdoch? I don't know. I don't feel that much sympathy for him. I don't think this meaningfully affected Rupert Murdoch's net worth. Like no one is sleeping on the street tonight because they invested in Theranos. It was a really bad time for the employees, but they're not really sort of represented here. It was a really bad time for some patients who got bad medical results. It is odd that the investors are at the center of the trial when they're kind of the least sympathetic players here. This obviously doesn't justify the fraud that allegedly took place behind the scenes at Theranos. But it does point to a larger pattern of behavior in Silicon Valley that has become somewhat problematic. Investors blindly tossing huge sums of money behind overheated companies that, in reality, only have a small chance of succeeding in the first place. If you really researched what Holmes was promising, it didn't add up. Testimony from the trial has revealed that many investors failed to exercise due diligence before handing over millions in funding to Theranos. Many barely knew anything about the healthcare industry at all. You got people who were sort of very prestigious and very important, but maybe not rigorous enough to really check what was being claimed. Success builds more success. So you hear, oh, Rupert Murdoch invested in this company. Well, he must have done his research. Well, why did Rupert Murdoch invest? Well, he heard that the army was using it. None of these were people who were really experienced in the blood testing world. And when you got someone like that who was, you know, Bill Gates famously looked at their technology, he has a lot of money, he's interested in investing in things, but he has this larger background in looking at, okay, what are the medical interventions? What can we be looking at? And he was like, this doesn't make any sense. No one could test that much from a drop of blood. And the things they're saying about how they're doing it don't add up. Ultimately, what may have led Theranos to use allegedly deceptive tactics was the momentum from the investors themselves, who wanted so badly to turn a profit that they ultimately couldn't see through all the hype. I think people are very, very angry at Elizabeth Holmes. I think you have people who are mad at, you know, maybe the media that enabled her. If you wrote an article saying, oh, this is this visionary genius, you sort of feel like a bit of a doofus. But like, even now, I don't think the people who invested in Theranos and like enabled all of this are seeing any real consequences from it.
 Elizabeth Holmes built her entire Theranos empire around a product that was supposed
 to solve one of the biggest hurdles in healthcare, access to affordable blood testing.
 With her revolutionary Edison machine, a single drop of blood would be able to run up to 240
 tests from albumin to white blood cell count and everything in between.
 It was going to change healthcare as we knew it.
 Our work is in the belief that access to health information is a basic human right.
 By 2015, Forbes named Holmes the youngest and wealthiest self-made billionaire in the
 US.
 Until we put Elizabeth on our cover just a few months back, I hadn't heard of you, I
 hadn't heard of the company, and yet your company is valued at over $9 billion.
 But there was a catch.
 Behind closed doors, the Edison machine simply didn't work nearly as well as promised.
 And Theranos was essentially a sham.
 But with hundreds of millions of dollars in funding, Theranos allegedly continued to persuade
 investors into believing in their cause.
 And the investments kept coming.
 Venture capital funded companies are nothing new for Silicon Valley.
 In many ways, investors have become one of the most important parts of the entire startup
 ecosystem.
 When I'm an investor in a startup, I assume that 60% of them are going to go out of business.
 The question is, why did investors embrace a startup like Theranos, which built its entire
 empire around a product that didn't work?
 And now, with Elizabeth Holmes on trial for allegedly lying to them, why do so few of
 them seem mad about it?
 There is a great technology and it's going to happen and she will have had a huge hand
 in making that happen.
 Having grand ambitions isn't a crime.
 Holmes often presents some pretty wild ideas.
 So this will enable the creation of a lunar base.
 But if a company allegedly uses deceptive practices in order to raise hundreds of millions
 of dollars, well, that's a different story.
 And why Elizabeth Holmes is on trial for numerous charges related to wire fraud.
 It's very rare that we see the CEO of a company facing criminal charges, much less the founder
 of a startup.
 Russell Brandom is policy editor at The Verge.
 He's been following the Holmes trial since the beginning.
 A lot of the charges here are wire fraud because they wired the money.
 So if they had mailed cash, it would be mail fraud.
 Most of them are wire fraud against investors.
 Allegedly she said things that weren't true.
 And then based on those lies, she was raising money and that's fraud.
 In 2015, the Wall Street Journal published a slew of articles revealing multiple levels
 of deceptive practices.
 Theranos allegedly covered up these practices while continuing to coax money from wealthy
 investors.
 And the list is impressive.
 Media mogul Rupert Murdoch, General Jim Mattis, who also served on the Theranos board, and
 even the Walton family.
 You know, the richest family in the world.
 So because of that culture of venture capital, investors always, always defend their companies.
 And you see even after a lot of the reporting has come out saying, look, these machines
 are not working.
 Something doesn't smell right here.
 A lot of investors were still defending Elizabeth Holmes saying, oh, she's the next Steve Jobs.
 You're just trying to take down a sort of visionary founder.
 Are you willing to admit that you were wrong about this one?
 Absolutely not.
 I feel that we have taken down another great icon.
 I think really it's just they want to give everything as much runway as possible.
 And they figure, look, either things will work out and then I'll get rich and look like
 a genius or it won't and it's not really my problem.
 For most of the Theranos investors, the amount of money lost pales in comparison to their
 net worth.
 And while some were able to claw back their investment, many simply lost it all.
 You know, is the victim here Rupert Murdoch?
 I don't know.
 I don't feel that much sympathy for him.
 I don't think this meaningfully affected Rupert Murdoch's net worth.
 Like no one is sleeping on the street tonight because they invested in Theranos.
 It was a really bad time for the employees, but they're not really sort of represented
 here.
 It was a really bad time for some patients who got bad medical results.
 It is odd that the investors are at the center of the trial when they're kind of the least
 sympathetic players here.
 This obviously doesn't justify the fraud that allegedly took place behind the scenes at
 Theranos.
 But it does point to a larger pattern of behavior in Silicon Valley that has become somewhat
 problematic.
 Investors blindly tossing huge sums of money behind overheated companies that, in reality,
 only have a small chance of succeeding in the first place.
 If you really researched what Holmes was promising, it didn't add up.
 Testimony from the trial has revealed that many investors failed to exercise due diligence
 before handing over millions in funding to Theranos.
 Many barely knew anything about the healthcare industry at all.
 You got people who were sort of very prestigious and very important, but maybe not rigorous
 enough to really check what was being claimed.
 Success builds more success.
 So you hear, oh, Rupert Murdoch invested in this company.
 Well, he must have done his research.
 Well, why did Rupert Murdoch invest?
 Well, he heard that the army was using it.
 None of these were people who were really experienced in the blood testing world.
 And when you got someone like that who was, you know, Bill Gates famously looked at their
 technology, he has a lot of money, he's interested in investing in things, but he has this larger
 background in looking at, okay, what are the medical interventions?
 What can we be looking at?
 And he was like, this doesn't make any sense.
 No one could test that much from a drop of blood.
 And the things they're saying about how they're doing it don't add up.
 Ultimately, what may have led Theranos to use allegedly deceptive tactics was the momentum
 from the investors themselves, who wanted so badly to turn a profit that they ultimately
 couldn't see through all the hype.
 I think people are very, very angry at Elizabeth Holmes.
 I think you have people who are mad at, you know, maybe the media that enabled her.
 If you wrote an article saying, oh, this is this visionary genius, you sort of feel like
 a bit of a doofus.
 But like, even now, I don't think the people who invested in Theranos and like enabled
 all of this are seeing any real consequences from it.