Granted, the company seemed like a much surer bet now. Don’s
email said Theranos had “signed contracts and partnerships with very
large retailers and drug stores as well as various pharmaceutical
companies, HMO’s, insurance agencies, hospitals, clinics and various
government agencies.” It also said the company had been “cash flow
positive since 2006.”
Mike and ten of his family members had pooled their money
together in a limited liability company so they could invest in these
types of venture deals. After conferring with them, he decided to pull
the trigger on the investment and sent Don $790,000. Dozens of other
Lucas Venture Group investors, known in industry parlance as
“limited partners,” did the same, cutting checks of varying amounts.
They ranged from Robert Colman, a cofounder of the defunct San
Francisco investment bank Robertson Stephens & Co., to a retired
Palo Alto psychotherapist.
—
BY THE FALL of 2013, money was flowing into the Valley ecosystem at
such a dizzying pace that a new term was coined to describe the new
breed of startups it was spawning. In an article published on the
technology news website TechCrunch on November 2, 2013, a venture
capitalist named Aileen Lee wrote about the proliferation of startups
valued at $1 billion or more. She called them “unicorns.” Despite their
moniker, these tech unicorns were no myth: by Lee’s count, there were
thirty-nine of them—a number that would soon soar past one
hundred.
Instead of rushing to the stock market like their dot-com
predecessors had in the late 1990s, the unicorns were able to raise
staggering amounts of money privately and thus avoid the close
scrutiny that came with going public.
The poster child of the unicorns was Uber, the ride-hailing
smartphone app cofounded by the hard-charging engineer Travis
Kalanick. A few weeks before Elizabeth’s Journal interview, Uber had
raised $361 million at a valuation of $3.5 billion. There was also