The Tale of Theranos:
A business plan is often not worth the paper it’s ‘written” on! If you have enough money, you can get professional people to write a business plan for you that investors would find enticing. The problem with business plans is that it often contains future projected revenue.
If you intend to defraud investors’ it could happen even if they do due diligence on the company.
Race Matters:
The difference between a Black woman needing investors and a white woman such as Elizabeth Holmes is the colour of their skin. Black and Brown women can only dream of presenting a business plan to investors, and then with no due diligence, they would pour millions of dollars into the company.
Racism has taught us white people are “given” the benefit of the doubt, and Black people are “treated” with suspicion! It’s this very reason why Elizabeth Holmes could start a company called Theranos, flash a business plan to investors only to sit back and watch the money pouring in.
Elizabeth Holmes and Ramesh “Sunny” Balwani, is charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. It is alleged that they engaged in a multi-million-dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients. Both “schemes” involved efforts to promote Theranos, a company founded by Holmes. Theranos was a private health care and life sciences company with the stated mission to revolutionize medical laboratory testing through allegedly innovative methods for drawing blood, testing blood, and interpreting the resulting patient data.
Based on Trust:
What is evident in the ongoing trial is that white investors did not do their due diligence but instead looked at an “innocent” blonde, blue-eyed, smooth-talking woman and happily entrusted millions of dollars to her. One investor, Alan Eisenman, a retired Texas money manager and financial planner, took the stand in Elizabeth Holmes’s trial to give evidence to what led him to invest more than $1 million in Theranos Inc.
Mr Eisenman said he relied primarily on Ms Holmes directly for information about the company before his initial 2006 investment. Because he had direct access to her, and she would always take his calls, he invested again in 2013, even though by that time, he had grown suspicious.
Wealthy white men invested 400 hundred million dollars and, by the sounds of it, looked more at Elizabeth Holmes blue eyes than the business plan in front of them.
In the Real World:
In the world Black and Brown people live in, this would not be possible, even in their wildest dreams. The only time white men invest that type of money into anything “Black” is an athlete or musician. Even then, they have “fail-proof” contracts to safeguard their investments.
The reality is that when Black women have a business idea and need funding, you can bet that investors would do due diligence’s and that those Black and Brown women would have to sign personal surety before seeing a cent. We have seen it with banking institutions when applying for a small business loan or overdraft facility.
Do we celebrate this?
Though the first instinct would be to celebrate this failure in the hope that it teaches white men a lesson, it goes beyond that first thought. Sadly, this reckless investing with the “wrong” companies or people only “teaches” white men to mistrust Black and Brown women more. They figure that because (by their reasoning), which is fuelled by our socialization, if they could not trust a white woman, then “imagine” how much worse “trusting” a Black woman would be? This disadvantages Black women even more, although they were not involved in schemes such as Theranos.
Don’t cite the few examples of white men investing in businesses run by Black and Brown women because I’m referring to the norm, not the exception.
I encourage you to watch the movie: The Inventor: Out for Blood in Silicon Valley.
