How Elizabeth Holmes lured rich VIPs like Rupert Murdoch to back Theranos

By Joel Rosenblatt

Elizabeth Holmes targeted ultra-wealthy families as early backers of Theranos to avoid the potential pressure from larger investment firms to go public, according to an investor at the DeVos family office who kicked in $US100 million for the blood-testing startup.

Lisa Peterson, who helped manage the DeVos family fortune at RDV Corp., testified at Holmes’s criminal fraud trial on Tuesday that the hot-shot 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.

Elizabeth Holmes at the federal courthouse for her trial in San Jose, California last month.
Elizabeth Holmes at the federal courthouse for her trial in San Jose, California last month.Credit:AP

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 $US1 billion. “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 fortune.

Peterson told jurors how the DeVos family was introduced to Holmes by an estate lawyer, and how she distilled and summarised information in the binders and from a late 2014 phone conversation with Holmes. She shared her notes ahead of a trip she took with Doug DeVos, Rick DeVos and Cheri DeVos took to meet Holmes and Theranos President Ramesh “Sunny” Balwani.

Holmes and Balwani showed the group the company’s analyser and operated it, Peterson said. During a meeting that lasted four to five hours, Cheri DeVos went to a separate room to have her blood tested, Peterson said, adding that she didn’t think Cheri DeVos ever got the results.

“We talked for a long, long time, everything was favourable toward the end,” Peterson said, adding that she talked with family members for about 15 minutes afterward.


Earlier there had been talk about investing $US50 million, she said, but Holmes had discussed in the meeting that other families were investing $US100 million. “Doug and Jerry said that $US100 million might be better for us to do.”


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