This is what a venture capitalist in deep, deep denial sounds like: Theranos backer Tim Draper
There was once a moment in time when Theranos was one of the most successful startups in the country—a blood-testing dynamo that would change medical science forever, improve the lives of millions of people, and make a hefty chunk of change for its investors.
Venture capitalist Tim Draper appears to still be living in that moment.
If you haven't been keeping up with the Theranos saga, the company's been in a downward spiral since October 2015, when Wall Street Journal reporter John Carreyrou first reported that the company wasn't relying on their own blood-testing machines they touted as being a revolutionary step in medical testing.
At the time, Theranos was reportedly valued at around $9 billion.
Since then, the company's been the subject of a variety of sanctions, regulatory issues and lawsuits. Theranos has laid off hundreds of employees and sold off its headquarters in Palo Alto. On Tuesday, the WSJ reported that Theranos had failed a second major inspection at its lone active lab.
Draper, an early investor in Theranos, is a major name in the world of venture capital. He's a founding partner of Draper Fisher Jurvetson, which has made investments in Tesla, SpaceX, Twitter, Twilio, SolarCity and a variety of other major tech companies. And as a venture capitalist, it's Draper's job to triage, and answer the question central to Theranos's downfall: Who's to blame?
Well. According to Draper, who gave an interview to the new business-tech media startup Axios, it's the reporter behind the story, it's the WSJ, it's the competitors. In short everyone but the people at the heart of Theranos, including its founder, Elizabeth Holmes.
Here is Draper, actually saying this, as quoted by Axios:
This, for the record, is what a venture capitalist in deep, deep denial sounds like.
Draper said he wasn't troubled by the initial report about problems at Theranos. By the second report, he had already identified what he called a "vendetta."
"I dismissed it because there are always writers who want to take down big successes," Draper told Axios. "Then after the next one I realized there was some strange vendetta. Maybe it had to do with money. The guy is getting $4 million to continue this charade."
Emphasis ours, because it's worth pointing out here that a venture capitalist just accused a reporter of taking a four million dollar check.
And speaking of that reporter, "the guy" that Draper is accusing of taking a $4 million bribe? Wall Street Journal reporter John Carreyrou, whose coverage of Theranos has been broadly recognized as having been thorough and accurate. He and the WSJ were reportedly threatened by Theranos with legal action; the company hasn't followed through on that. Likely because they'd lose.
As far as that $4 million figure, nobody is quite sure where it came from. We checked in with Carreyrou, who responded to our questions about Draper's claims via email.
Basically, he's got no idea what Draper's referring to, and claimed that Draper had made the same claim to Fortune magazine last summer—but the number was $6 million:
When pushed on why Theranos continues to encounter trouble beyond bad press, Draper verged on accusing the WSJ, the government, and the medical industry of entering into a conspiracy to sink Theranos.
Draper declined to concede that Theranos did anything wrong at all. The company's problem, he said, was that it was just too disruptive to the status quo.
"When an industry gets transformed, people who work for the status quo have lives that get challenged. They will do whatever it takes to take down the source of the transformation. In this case, that Wall Street Journal writer keeps pounding away but there isn't anything there," Draper [the investor of a now-flailing startup that was once reportedly valued at $9 Billion] said.
Editor's note: This story has been corrected to clarify the name of the publication referred to by Carreyrou.
