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Matt Levine

Slaying the Blood Unicorn

Also coal, BlackRock, BlockbusterDAO, Santander and an NFT song.

In the early 2010s, Elizabeth Holmes pretended that she had invented a new technology to do blood tests, and used this pretend technology to raise several hundred million dollars from gullible investors for her blood-testing startup, Theranos. Back in the 2010s this was all viewed as pretty noteworthy stuff, and it was huge news when Theranos’s technology turned out to be fake. We talked about it a bunch here at Money Stuff, and at some point I coined a pseudo-Linnaean name for Theranos, Elasmotherium haimatos, the Blood Unicorn. 

Now of course it is 2022 and we are all a bit more jaded. There was the SoftBank boom, we’ve had a couple of years of SPACs, there is so much crypto. Raising hundreds of millions of dollars from gullible investors who don’t do much due diligence is not particularly impressive anymore. If you want to do it by pretending to have a technology, you can (try electric vehicles!), but these days even that is optional. “In the past year, there has been a notable rush of funding into the high-risk category of early-stage startups, as investors have clamored to get into companies even before they had a staff or product,” the Wall Street Journal reported on Sunday. Or you can raise lots of money from investors by letting them pretend to own digital pictures of apes, or by just saying “hey here’s a Ponzi.” Theranos raised a lot of money from investors who did not do too much due diligence, because the world was awash in money and investors got careless; that is much, much, much, much more true now, and Theranos looks a little quaint.