Elizabeth used Shultz’s connections to get a WSJ Weekend Interview to coincide with the launch. The interview was a friendly setting, with a pro-business & anti-regulation ethos.
Theranos was about to launch. Its devices were being used by the military too. Elizabeth offered Don Lucas a discount investment opportunity - $15m at a $6b valuation; 7 years ago, Theranos was valued at $40m.
Uber had raised $361m at $3.5b. Spotify raised $250m at $4b. Theranos would eclipse them.
Elizabeth beefed up security detail under the paranoia that Quest and LabCorp were after them.
Theranos claimed their finger-stick tech covered 1,000/1,300 blood test codes - but many blood tests involve many billing codes…
That Theranos was as accurate as traditional testing was drawn from the commercial blood analyzers - not from the miniLab nor from the Edison. Theranos claimed to have 300 tests that represented 99.9% of all lab requests. Each of these tests had been submitted for FDA approval.
Sunny and Elizabeth further claimed that Theranos could run 70 different tests simultaneously on a single finger-stick sample.
But immunoassay didn’t cover all blood tests. The left over blood was too little for other tests. How did Theranos solve difficulties that had bedeviled an entire branch of bioengineering research?
In addition to Shultz and Mattis, the board included former Sec. State Henry Kissinger, former Senate Armed Services Committe Chairman Sam Nunn, and former Navy Admiral Gray Roughead. Starting from Shultz, Elizabeth methodically cultivated each one and offered board seats in exchange for stock grants. This board lent credence to assertions that Theranos’s devices were being used by the military. And with one of the country’s top lawyers, what could go wrong?
Financial projections differed. Compared to the ones sent to the Partner Fund, those used to pricing stock options for employees had lower estimates. In 2014, the profits and revenues were $130m and $980m lower. In 2015, profits and revenues were $211m and $1.55b lower.
On Feb 2014, Partner Fund bought $96m in shares, bringing Theranos’s valuation to $9b. Elizabeth, owning slightly more than half, was worth almost $5b.