Report: Elizabeth Holmes Bounced $10M Investment in 2006

Liz and Hank Aldersey-Williams and Deborah Jacob were first introduced in 2009 as key players in the burgeoning Silicon Valley venture capital scene, but all four had a common financial conflict: Elizabeth Holmes was about to start her cutting-edge diagnostics company, Theranos.

All four invested together in a money-losing spinoff called Retrophin, which was briefly headed by Andrew R. Blum, a co-founder of Theranos and Andrew R. Paxson, a former Theranos board member. Mr. Blum has become entangled in the federal fraud investigation of Theranos as an investor in Retrophin, and some of Retrophin’s creditors are suing Mr. Blum and others alleging that he and others manipulated Theranos’ finances to deprive it of cash needed to repay investors and creditors.

Elizabeth Holmes had done little marketing or communication about Theranos. Robert Colangelo, a Harvard-trained doctor, spoke at least twice with her at meetings, but never showed her the company’s technology or any equipment he tested. (Dr. Colangelo has said he was targeted by Mr. Holmes for any critical comments he might have made at those meetings.)

Two years after Ms. Holmes launched Theranos in 2003, Retrophin had a $10 million funding round, and Ms. Holmes’ public relations representative, company secretary Amy Baker, flew to San Francisco to meet with Retrophin investors and Mr. Blum.

Ms. Holmes and her attorney, Sean Wilentz, showered Ms. Baker with praise and said she was “assisting and crediting her for being present at all times during the launch event.”

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