Investing in Theranos: The Evaluation Strategy of Google Ventures

The 2000s were witness to the hype and rise of Theranos, a company that promised to revolutionize blood testing and medical diagnostics with its innovative technology. However, the truth behind Theranos unraveled as a major scandal, and accusations were made about the validity of the company's technology and fraudulent practices. Bill Maris, a partner at Google Ventures, later shed light on the reasons behind why his firm did not invest in Theranos, offering a detailed glimpse into the strategic evaluation process of the investment.

Strategic Evaluation of Theranos

In this article, we will delve into the strategies employed by Google Ventures in evaluating the investment, using Bill Maris' insights. The following factors outline how they made their decision:

Having In-House Expertise

The first and foremost primary criterion was having in-house expertise. Google Ventures actively maintains a life-sciences investment team, which works closely with potential investment opportunities in the medical and technology sectors. This team ensures that the investment is aligned with the strategic and ethical requirements of the venture capital firm. In the context of Theranos, the team's scientific and medical expertise served as a critical factor in evaluating the technological claims and potential market impact.