Theranos, founded in 2003 by Elizabeth Holmes, aimed to revolutionize blood testing by developing technology capable of conducting numerous tests with just a few drops of blood. The company attracted significant investments, amassing over $700 million and achieving a valuation of approximately $9 billion at its peak. Holmes, at one point, was recognized as the world's youngest self-made female billionaire.

However, in 2015, investigative reports began to challenge the validity of Theranos's technology. It was revealed that the company's proprietary devices, notably the "Edison" machine, often produced inaccurate results. To compensate, Theranos secretly relied on traditional blood analysers from other manufacturers, contradicting their public claims.

The ensuing scrutiny led to multiple legal challenges. In 2018, the U.S. Securities and Exchange Commission charged Theranos, Holmes, and former company president Ramesh "Sunny" Balwani with fraud. Holmes was found guilty on four counts of defrauding investors in January 2022 and sentenced to over 11 years in prison. Balwani was also convicted and received a nearly 13-year sentence.

The Theranos scandal underscores the importance of transparency and due diligence in the start-up ecosystem, highlighting the potential consequences of prioritizing rapid growth over ethical standards.