How Elizabeth Holmes lured rich families to back Theranos

SAN JOSE: Elizabeth Holmes targeted ultra-wealthy families as early backers of Theranos Inc to avoid the potential pressure from larger investment firms to go public, according to an investor at the DeVos family office who kicked in US$100mil (RM415mil) for the blood-testing startup.

Lisa Peterson, who helped manage the DeVos family fortune at RDV Corp, testified at Holmes’ criminal fraud trial Tuesday that the smooth-talking entrepreneur courted the family with voluminous investment binders, private conversations, a lengthy tour of the company in Palo Alto, California, and a personalised on-site blood test.

The DeVos family, whose patriarch was a billionaire industrialist, gave its support to Theranos in 2014, by which time Theranos was one of Silicon Valley’s hottest companies and Holmes was gracing magazine covers.

“She was hand-picking five or six private families to invest in her firm,” Peterson told jurors in federal court in San Jose, California.

“She was inviting us to participate in this opportunity,” she said, adding that the company projected revenue for 2015 of almost US$1bil (RM4.15bil). “They wanted to get to know us as much as we wanted to do due diligence on them.”

The testimony offered an inside look at how Holmes pitched a handful of the world’s wealthiest people on her idea. Other families include Rupert Murdoch, Riley P. Bechtel and Alice Walton, heiress to the Walmart Inc fortune. — Bloomberg