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Safeway, Theranos Split After $350M Deal Fizzles

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Re: Safeway, Theranos Split After $350M Deal Fizzles

#61

Post by beachstartup »

jessaustin wrote: post #51
sk5t wrote: post #32

Earlier quoted context omitted.

Well, Holmes _did_ reassure Burd. We cannot rule out the possibility that she is an exceptionally deft reassurer. In seriousness, Safeway gets durable capital improvements to their stores for their $350mm, still useful without Project T-Rex.

We cannot rule out the possibility that she is an exceptionally deft reassurer. So that's what they're calling it these days...

yeah, everybody's thinking it, but nobody's going to cross that line (especially on the record) without some incontrovertible evidence which is unlikely to say the least.

Re: Safeway, Theranos Split After $350M Deal Fizzles

#62

Post by PopeOfNope »

Pyxl101 wrote: post #27
danso wrote: post #21

Earlier quoted context omitted.

One of the most irritating things about Theranos's defenders is their argument about how Theranos should be given lesser scrutiny because of how important and noble its mission is...that's the exact opposite of how it should be, IMO. Using Facebook as the archetypical unjustifiably-rich-startup (not my opinion, just well-repeated), in which the goal is to lower friction between friend-network-contacts...even if FB's…

> But the bigger problem is that it isn't easy to compare health tests... It ought to be relatively easy. I mean, not easy for the average Joe, but easy for anyone seriously interested in doing it. Draw blood twice: once with the finger prick, and once with a regular vein draw, and then test the two samples using the different methodologies. Compare the results. Seems like a fairly trivial experiment to run and repro…

> It ought to be relatively easy. ... Seems like a fairly trivial experiment to run and reproduce.

That depends on what you're testing. "Blood test" and "health test" are ridiculously ambiguous terms. Something like red blood cell counts don't vary much from day to day, but some things, like blood sugar and cortisol, vary hour to hour.

Re: Safeway, Theranos Split After $350M Deal Fizzles

#63

Post by sk5t »

beachstartup wrote: post #61
jessaustin wrote: post #51

Earlier quoted context omitted.

We cannot rule out the possibility that she is an exceptionally deft reassurer. So that's what they're calling it these days...

yeah, everybody's thinking it, but nobody's going to cross that line (especially on the record) without some incontrovertible evidence which is unlikely to say the least.

I strongly disagree... there is no very good explanation for the current situation other than sloppy decision-making and a dirty snowball of social proof. The awkward, inexperienced captain at the helm is however a puzzle.

Re: Safeway, Theranos Split After $350M Deal Fizzles

#64

Post by JacobAldridge »

Pyxl101 wrote: post #37
JonFish85 wrote: post #30

Earlier quoted context omitted.

Not having been in that situation directly, I believe that it is fairly common for founder(s) to take some cash in exchange for their shares at the later stages, if only so that they don't feel the immediate need to cash out. It sucks to be cash poor while being worth $X billion on paper, so I believe investors would rather the founder turn some stock into $10m and not worry about money than to have a fidgety CEO.

Thank you. That makes sense. I suppose it happens with "hot" companies that have some negotiating leverage. I'm curious because if Holmes has been able to convert even 0.1% - 1% of her shares' current value along the way, that's a life-changing amount of money ($4.5m - $45 million). I'm very curious what the experience is like to be worth billions on paper via a private company. Can you get a mortgage? Can you borrow…

Last time I sat down with my mortgage broker (admittedly, in Australia where the private equity scene is abysmal) he advised me that none of the banks would take into account my shareholding in private companies as assets. Essentially, it's a crapshoot for them to justify the valuation so they aren't willing to attempt it.

I suspect there's a point where they will, somewhere before 'publicly listed companies' (which publish the market valuation on a moment by moment basis), but it's likely to be within established industries (partnership in a law firm, for example) not near my situation or most tech startups.

Re: Safeway, Theranos Split After $350M Deal Fizzles

#65

Post by harryjo »

Asparagirl wrote: post #60
alaskamiller wrote: post #29

Earlier quoted context omitted.

Biggest example is Snapchat, they got and keep asking for millions of dollars money when fundraising. Last year's big drama was Secret app's founder taking $6MM when they raised $25MM then proceeded to buy fancy cars. The product growth stalled and the company shut down in less than a year. Happened with Buffer.

Happened with Basecamp (formerly 37 Signals), too -- they're bootstrapped but they took a small investment from Jeff Bezos so that they could cash out a little bit and enjoy themselves.

Funny how they dedicate their blogging to attacking Bezos's business model, then make their living off of it.

Re: Safeway, Theranos Split After $350M Deal Fizzles

#66

Post by adventured »

Pyxl101 wrote: post #37
JonFish85 wrote: post #30

Earlier quoted context omitted.

Not having been in that situation directly, I believe that it is fairly common for founder(s) to take some cash in exchange for their shares at the later stages, if only so that they don't feel the immediate need to cash out. It sucks to be cash poor while being worth $X billion on paper, so I believe investors would rather the founder turn some stock into $10m and not worry about money than to have a fidgety CEO.

Thank you. That makes sense. I suppose it happens with "hot" companies that have some negotiating leverage. I'm curious because if Holmes has been able to convert even 0.1% - 1% of her shares' current value along the way, that's a life-changing amount of money ($4.5m - $45 million). I'm very curious what the experience is like to be worth billions on paper via a private company. Can you get a mortgage? Can you borrow…

At the scale of Theranos / Holmes you can easily borrow against your huge wealth. She was pegged recently - before this mess - by Forbes as being worth $4.5 billion.

The best option would be to go to a giant firm like Goldman Sachs. They would have written her a check for $100+ million prior to all of this unfolding. They might still consider it, but Goldman would do a very thorough rectal exam of the company and its prospects now.

If you wanted to borrow against private wealth of the sort Holmes was sitting on, you'd avoid common banks. Not because they won't give you a mortgage on a house, but because it wouldn't be even remotely worth the hassle of going through them. If you just wanted $500k for a mortgage, your best bet would be to make a call to one of the big VCs backing you, they'd cut you that check under all sorts of arrangements with hardly any questions asked.

Re: Safeway, Theranos Split After $350M Deal Fizzles

#67

Post by [deleted] »

sk5t wrote: post #63
beachstartup wrote: post #61

Earlier quoted context omitted.

yeah, everybody's thinking it, but nobody's going to cross that line (especially on the record) without some incontrovertible evidence which is unlikely to say the least.

I strongly disagree... there is no very good explanation for the current situation other than sloppy decision-making and a dirty snowball of social proof. The awkward, inexperienced captain at the helm is however a puzzle.

[deleted]

Re: Safeway, Theranos Split After $350M Deal Fizzles

#68

Post by rasz_pl »

goodJobWalrus wrote: post #7

Is having blood tests in grocery stores / pharmacies a newish thing in the US, or it existed for a long time? I lived in the US in 2004-2007, and had blood tests regularly, but it would have never occurred to me to go to a grocery store for one.

Thats one of the things that happens in a country without universal healthcare.

Re: Safeway, Theranos Split After $350M Deal Fizzles

#69

Post by adventured »

nemo44x wrote: post #47
danieltillett wrote: post #23

Earlier quoted context omitted.

I will be very surprised if Elizabeth hasn’t crossed the line over to fraud at some point. She is pulling down some very well connected people - she had better like orange.

I'm not even sure it's her fault or the fools who gave a 20 year old billions of dollars to startup a healthcare company. What could go wrong?

It should be pointed out that she never got billions of dollars to start Theranos.

She was 21 or so when Theranos got a $5.8m A round. She's now 31.

https://www.crunchbase.com/organization/theranos

Re: Safeway, Theranos Split After $350M Deal Fizzles

#70

Post by fit2rule »

harryjo wrote: post #65
Asparagirl wrote: post #60

Earlier quoted context omitted.

Happened with Basecamp (formerly 37 Signals), too -- they're bootstrapped but they took a small investment from Jeff Bezos so that they could cash out a little bit and enjoy themselves.

Funny how they dedicate their blogging to attacking Bezos's business model, then make their living off of it.

The very definition of disruption.
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