Sumary of The lessons for investors from the trial of Theranos founder Elizabeth Holmes:
- As Elizabeth Holmes, founder and former CEO of Theranos, goes on trial on allegations of defrauding investors and patients, her health-care start-up may be a prime example.
- Nearly a decade ago, investors, including media mogul Rupert Murdoch, former Education Secretary Betsy DeVos and the Walton family of Walmart fame, put more than $700 million into the company.
- Prosecutors allege investors were swayed by misrepresentations of Theranos’ blood-testing technology.
- “Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday.
- ” How to spot a problem”It’s important that we don’t assume that every company is like a Theranos, we just need to ask the right questions,” said Ruby Gadelrab, founder and CEO of MDisrupt, a medical diligence company for the health-tech industry, which aims to avoid making similar mistakes in the future.
- “To help investors vet health-technology companies, Gadelrab suggests first establishing if the product is clinically and commercially viable.
- “Investors do technical and financial diligence using experts, in health care we need to do medical diligence using health-care experts.