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"Just 200m"! These guys and the VC s are operating in a different realm from any bootstrapped company that don't aim to "exit". This makes me think that sadly b
by cft 10y ago
"Just 200m"! These guys and the VC s are operating in a different realm from any bootstrapped company that don't aim to "exit". This makes me think that sadly bootstrapping high tech in the silicon valley is nearly impossible in this century.
- gwern 10y agoI wondered why Holmes had never been forced out by investors or banks as a precondition of getting more support, but this explains why she's still there - they can't, because she has majority share power and Theranos still has oceans of cash and no need to go begging to anyone. There's simply no way to stop her or force her out aside from long-shot minority shareholder lawsuits (although I think there's at least one of those ongoing), and it'll take years or decades for all the lawsuits to finish appeals and to spend the cash down with a skeleton crew. Indeed, given how her reputation is radioactive, why would she ever leave Theranos anytime soon? No one is going to hire her for anything anywhere else; she can continue drawing a CEO salary/benefits and keep playing CEO and a sense of self-worth; she gets Theranos to pay her legal bills (which may not be trivial by the end); and can mess around with an enormous fortune of $200m however she likes; and who knows, may even succeed in a pivot to something else - hope springs eternal. (I wonder how much cash Magic Leap has left.)
- spitfire 10y ago> No one is going to hire her for anything anywhere else; Yes they will. She'll pop back up in a few years. Maybe in a hedge fund, VC/PE firm or something, but she will. For an example of this see Kaavya Viswanathan. She's in the club now and she's towing the line, it's hard to get kicked out of the club when you're towing the line.
- koolba 10y agoThis would be a great longbet.
- ghaff 10y agoSadly you are probably right as I do think her actions at least border on the criminal. But there are plenty of bolt holes largely out of the public eye for well-connected people.
- maverick_iceman 10y agoI think given her family's connections she's far more likely to end up in politics.
- pcsanwald 10y agoI wondered the same thing, and this is a great explanation as to why. thank you!
- kqr2 10y agoElizabeth Holmes also has a special class of shares which gives her 100 to 1 voting rights: http://www.forbes.com/sites/petercohan/2015/11/03/theranos-letter-shows-elizabeth-holmes-tried-to-take-control-from-shareholders/#1eabd82f479e http://www.forbes.com/sites/petercohan/2015/11/03/theranos-l...
- gwern 10y agoYes, everyone knows that. The point is that if your company is bankrupt and you go to the bank for a loan and they say 'sure, but only if the CEO quits and forfeits all her shares', there's not much the CEO can do about that. The shares become worthless in a bankruptcy anyway. So I wondered why this never happened. But now I know: they have far more cash on hand than I ever dreamed would be left at this point.
- notatoad 10y ago>as a precondition of getting more support Nobody is still putting money into Theranos, are they?
- gwern 10y agoIf the price is right, someone will invest in anything.
- hkmurakami 10y agoDo you mean SV the region or SV the industry? It's possible, but one precondition is that you don't face VC backed competitors in your space.
- AndrewKemendo 10y agoThis makes me think that sadly bootstrapping high tech in the silicon valley is nearly impossible in this century Probably correct.