Elizabeth Holmes: Biography, Theranos Founder, Entrepreneur

Who Is Elizabeth Holmes?

Elizabeth Holmes is the founder and former CEO of Theranos, a failed Silicon Valley–based health technology startup that marketed cheaper, non-invasive blood testing. After seeing the valuation of the company soar to more than $9 billion, a series of reports emerged that Holmes’ technology was faulty and that many of the 7.5 million tests it ran might have been inaccurate. In June 2018, Holmes and ex-Theranos Chief Operating Officer Ramesh “Sunny” Balwani were indicted on 11 federal charges, including wire fraud and conspiracy to commit wire fraud. Holmes was found guilty on four counts in January 2022. She is now serving an 11-year prison sentence.

Quick Facts

FULL NAME: Elizabeth Anne Holmes
BORN: February 3, 1984
BIRTHPLACE: Washington, D.C.
SPOUSE: Billy Evans (2019-present)
CHILDREN: William and Invicta
ASTROLOGICAL SIGN: Aquarius

Early Life and Education

Born on February 3, 1984, in Washington, Elizabeth Anne Holmes is the daughter of Noel, a former Capitol Hill committee staffer, and Christian, who worked for a series of governmental agencies, including the United States Agency for International Development (USAID). The family moved from Washington to Houston when Holmes was young.

Holmes began her entrepreneurial career early, when her teenaged interest in computer programming led her to start a business selling coding translation software to Chinese universities. She also began studying Mandarin Chinese at a young age, which allowed her to attend a series of college-level classes while still in high school. She began attending Stanford University in 2002, where she studied chemical engineering and worked alongside Channing Robertson, a dean who would become one of Theranos’ first board members.

Founding Theranos

Holmes’ inspiration for her company came during a summer internship at the Genome Institute of Singapore, in 2002, where she worked on research and testing for Severe Acute Respiratory Syndrome, or SARS. Her initial plan, for which she received a U.S. patent in 2003, was for a drug delivery system that would administer drugs, test their effectiveness, and then adjust the drug’s dosage as needed—all in one small patch.

Holmes left Stanford at age 19, and using her college tuition money as seeding, founded a company called Real-Time Cures. Over the next several years, Holmes shifted her focus to creating a new form of blood testing, claiming it was based on her own fear of needles. The company was rebranded as Theranos, an amalgamation of the words “therapy” and “diagnosis.” One early investor was venture capitalist Tim Draper, the father of a childhood friend and founder of Draper Fisher Jurvetson.

Theranos soon claimed to have developed several proprietary methods. One eliminated the need to collect blood samples through traditional needles, instead using a finger stick that collected tiny amounts of blood into a small tube called a “nanotainer.” Another was a laboratory machine that was able to run dozens of tests on the same, minute amount of blood, testing for illnesses such as diabetes, cancer, and heart disease. Theranos also pushed for new legislation in several states that would allow the tests to be administered without a doctor’s note.

Both technologies would have revolutionized the diagnostics industry, valued between $52–57 billion worldwide in the early 2010s. Theranos offered these blood tests at a significantly lower cost than traditional testing labs and hospitals. Whereas some conventional tests could cost hundreds of dollars, Theranos offered them for less than $5 and promised faster results.

Ramesh “Sunny” Balwani, seen here in June 2019, joined Theranos a decade prior as the company’s second-in-command.

In 2009, Holmes teamed up with Ramesh “Sunny” Balwani, a software engineer with no experience in health care or medicine but who had successfully founded and sold a tech company. He became the president and chief operating officer of Theranos, managing its day-to-day business.

Although the company refused to divulge its methods and technology (even to investors), claiming its proprietary nature made the company vulnerable to would-be competitors, it signed several lucrative deals, including one with Walgreens that saw Theranos labs introduced in nearly 50 of the chain’s locations, with expansion plans for thousands more. The company also claimed to have a partnership with the U.S. Department of Defense and pharmaceutical giants like Pfizer and GlaxoSmithKline, though those claims were later disproven. A planned $350 million deal with Safeway fell through as allegations against the company emerged.

Theranos Supporters

Net Worth

By 2014, Theranos was valued at $9 billion. That made 30-year-old Holmes, who owned 50 percent of the company’s stock, the world’s youngest self-made female billionaire, according to Forbes. Her net worth had ballooned to $4.7 billion (mostly tied up in Theranos stock) by 2015, according to Inc. magazine.

Bill Clinton moderates the closing session of the 2015 Clinton Global Initiative featuring Elizabeth Holmes and Alibaba Founder Jack Ma. Starting the previous year, Holmes became a prominent media figure and featured guest.

As her company soared into the spotlight, so did Holmes. She was featured in many newspaper and magazine profiles. Dressed in all black, including a mock turtleneck, Holmes was frequently compared to visionary Apple cofounder Steve Jobs, a comparison Holmes cultivated. Holmes worked seven days a week and claimed to have never taken a vacation, traits she strongly encouraged in her employees. One of her most notable features, her deep-pitched voice, came under scrutiny, with several press accounts noting that she purposefully lowered it, possibly as a means of gaining respect in the male-dominated world of Silicon Valley.

Today, Holmes’ estimated net worth is $0, and according to a New York Times profile, she is no longer altering her voice.

The Unraveling of Theranos

In the fall of 2015, a series of articles in The Wall Street Journal and other media outlets revealed serious issues within Theranos. The bombshell revelations included:

• many of its blood samples were being tested on standard diagnostic machinery (purchased from another company), rather than the so-called landmark “Edison” machine Holmes claimed to have perfected;
• the small percentage of tests that were performed on the Edison machines delivered sometimes highly inaccurate results; and
• the company had vastly overestimated its annual revenue forecasts to attract investors.

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Several former employees came forward as well, exposing the company’s strict ring of secrecy. They alleged that Holmes and Theranos President Ramesh “Sunny” Balwani were aware of the technologies’ flaws and that the Edison machines and the tests were not ready for widespread public use, but they forced employees to falsify testing data and run fake demonstrations of the machines for potential investors. Several employees were also threatened by Theranos attorneys.

Federal Investigations and Settlements

Both the Food and Drug Administration and the Centers for Medicare & Medicaid Services (CMS), a health care industry regulator, began investigations. In October 2015, the FDA stated that Theranos’ “nanotainer” vial was an “uncleared medical device,” and in January 2016, the CMS shut down Theranos’ Newark, California, laboratory, citing an “immediate jeopardy to patient health and safety.” By the end of the year, Theranos had shut down its “Wellness Centers,” and Balwani left his post as company president and COO. Investors were out millions of dollars, with several suing for restitution, including Walgreens.

In April 2017, Theranos settled with the CMS. The company paid a $30,000 fine and was banned from working in the blood-testing industry for two years. It pivoted to producing its technology, instead of processing clinical samples. That month, Theranos also settled a state fraud claim, refunding $4.6 million to testing customers in Arizona.

In March 2018, the Securities and Exchange Commission accused Theranos, Holmes, and Balwani of perpetrating a “massive fraud” to raise more than $700 million. In her settlement with the SEC, Holmes didn’t admit guilt but paid a $500,000 fine, relinquished majority voting control over Theranos, and was barred from holding a leadership position at any publicly traded company for 10 years.

Shutting Down

After layoffs, multiple investigations and settlements, and major leadership changes—Balwani left in 2016, and Holmes stepped down as CEO in June 2018—CEO David Taylor announced on September 5, 2018, that Theranos would dissolve after attempting to pay creditors with its remaining cash.

Criminal Charges, Trial, and Sentence

Holmes continued to deny the fraud allegations against her, but on June 14, 2018, a grand jury indicted her and Balwani on nine counts of wire fraud and two counts of conspiracy to commit wire fraud. The final indictment, from July 2020, included an additional count of wire fraud. They were tried separately in federal court.

Elizabeth Holmes exits a San Jose courthouse with her husband, Billy Evans, and parents Noel and Christian on January 3, 2022.

After two delays due to the COVID-19 pandemic and Holmes’ first pregnancy, her criminal trial began in earnest in September 2021. She pleaded not guilty and testified for seven days during the 15-week trial. On January 3, 2022, the jury found Holmes guilty on three charges of wire fraud, totaling nearly $145 million in transfers, and one charge of conspiracy to commit wire fraud. Holmes was acquitted on four additional charges, and the jury couldn’t reach a verdict on the three remaining counts.

That November, a U.S. district court judge sentenced Holmes to 11 years and three months in prison, followed by three years of supervised release. She and Balwani, who was found guilty on all 12 charges, must also pay $452 million in restitution. Holmes remained free on bond until beginning her prison sentence on May 30, 2023. She is serving time at a minimum-security women’s prison camp in Bryan, Texas.

Relationship with Sunny Balwani

Holmes met Ramesh “Sunny” Balwani while she was studying in China as a teenager. Despite a nearly 20-year age gap, the two eventually became romantically involved even before they were business partners. By 2005, they were living together, and when Balwani joined the company four years later, they kept their relationship a secret from investors and most employees.

In 2016, Balwani left Theranos, which by then was mired in controversy. Around this time, Holmes and Balwani’s romantic relationship also ended, and Holmes moved out of their shared home.

In an interview with The New York Times and during her testimony in her federal trial, Holmes has said Balwani was emotionally and sexually abusive. Holmes said he was critical at times and controlling about her diet and schedule, among other details of abuse. Because of these allegations, which Balwani’s legal team has denied, the two were tried separately despite their joint indictment. Balwani was convicted of all 12 charges and is serving a 13-year sentence.

Husband and Children

Elizabeth Holmes with her husband, Billy Evans, in March 2023

In 2017, Holmes met and began dating entrepreneur Billy Evans, whose family runs a hotel company in San Diego. They were married in 2019 and lived in California together, prior to Holmes’ prison sentence.

In July 2021, Holmes gave birth to their son, William. Her pregnancy delayed the start of her criminal trial by a few weeks. In February 2023, the couple welcomed their daughter, Invicta. Her family will be allowed to visit Holmes in prison.

Media Portrayals

An expansive look at Holmes and her company’s deceptions came in the 2018 best-selling book Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou, who first broke the story for The Wall Street Journal. Its film rights were sold even before the book was published, with director Adam McKay helming the not-yet-released project.

HBO followed suit with the March 2019 premiere of the documentary The Inventor: Out for Blood in Silicon Valley, by Oscar-winner Alex Gibney. Although Holmes didn’t participate in the documentary, it includes footage of her in other interviews and of Theranos.

In spring 2022, Hulu released the limited series The Dropout, which was adapted from a podcast of the same name. Amanda Seyfried played Holmes and won an Emmy for her performance.

Quotes

• Over the entry to one of [our] buildings was a sign that read, “Success is not the result of spontaneous combustion. You must set yourself on fire.”
• Every day for the past years, I have felt deep pain for what people went through because I failed them. I regret my failings with every cell of my body.

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