- Venture capitalist Tim Draper was an early investor in Theranos and was the company’s most public defender, even while the company and its CEO came under fire for misleading investors and the public.
- He said the reason that former Theranos CEO CEO Elizabeth Holmes is facing criminal charges is because the “media created a frenzy.”
- He said Theranos was doing “really good work” but said his VC firm had moved on.
Venture capitalist Tim Draper, the most prominent Theranos investor and defender, appeared on Cheddar on Tuesday, his first public interview since the U.S. filed criminal charges against Theranos CEO Elizabeth Holmes.
The billionaire backer said that he believed that Holmes was “innocent until proven guilty” and that he was still close to the disgraced entrepreneur.
Draper said that Theranos could have been a “great company,” like Uber, Tesla, or Skype, except that it was “attacked” too early and “forced to sort of fail.”
“Just because … I’ve always believed innocent until proven guilty. And she is an entrepreneur, her mission was to change healthcare as we know it, to make it an easier system, and she was doing really good work. And then she got the attack, and the attack came so soon, I believe she wasn’t prepared for it.”
Here’s a clip from the interview:
Early Theranos backer @TimDraper says he still stands by now ex-CEO Elizabeth Holmes even after she was charged with multiple counts of fraud: "I’ve always believed innocent until proven guilty." #CheddarLIVE pic.twitter.com/s2yJY5LUcq
— Cheddar (@cheddar) June 19, 2018
The attack that he is likely referring to is a series of investigative stories from Wall Street Journal reporter John Carreyrou, which revealed that the company was overstating the accuracy and capability of its blood tests. Those stories turned Carreyrou into an enemy to Theranos management.
Carreyrou followed up those stories with Bad Blood, a nonfiction book that was cited in last week’s charges that Holmes had allegedly defrauded investors, doctors, and patients. In the book, Carreyrou reports that Theranos technology went through several different iterations and the company faked demonstrations for years.
Draper said the reason that federal prosecutors filed criminal charges against Holmes is because the “media created such a strong frenzy.”
“That guy made a lot of money off of this!” Draper said, laughing. “Journalists are looking at that and going, ‘hey all I have to do is take down Zuckerberg and I get a movie deal and I get a something, or whatever.'”
Draper said that he had spoken to Holmes after the charges and that his firm, DFJ, had written off his investment in Theranos. Last Friday, Holmes resigned as CEO of Theranos. It looks certain to be liquidated, according to a letter to investors from earlier this year. “Our investment’s gone. We’ve written that off,” Draper said.
It’s not the first time that Draper has said that Theranos has been attacked or defended the company as doubts mounted. “Wait, why is [Theranos] worthless?” Draper asked in a CNBC interview in May. “It’s worthless because this writer was like a badger going after her, like a hyena going after her.”
Draper has also received attention recently for backing a proposal to split California into three states. He gave $1.2 million dollars to the campaign supporting the ballot measure.
“There is no excuse for people not being open to a new solution,” Draper told the LA Times. “[Critics] offer nothing but kneejerk rejection of discussion around one of the most meaningful initiatives to come through the ballot, ever!”