We asked 3 VCs: would you invest in Elizabeth Holmes’ next startup? | E2353

The panel did not reach a consensus on whether it would invest in Elizabeth Holmes’s next startup. In a hypothetical where Holmes offered 10% of a company for $3 million and another buyer might pay 50 times more, Sam said he would pass because he does not invest in hard tech or hardware. Jenny and Paige leaned toward a short-term “in and out” trade rather than a five-year investment; Paige would still take a meeting. One speaker predicted Holmes would not get another company funded by a16z, while allowing that prediction could be wrong. Another thought she might build a working prototype five years after prison, perhaps by solving a biotech problem with AI or joining someone who could, but was unsure how a possible lifetime ban would affect her.

Sam called Holmes’s Theranos claims intentional lies, not merely ambiguous language. The “device can run any test” pitch could lead investors to infer that broad capability had been demonstrated, when it depended on Theranos having built each test. Speakers said investors, including Rupert Murdoch, invested $100 million after hearing the pitch. They described Holmes as charismatic and able to elicit help, with Jenny characterizing her appeal as deliberate manipulation that evoked empathy. Harmonic tracked $786 million in Theranos funding, and a speaker said no top funds appeared among its investors; backers included family offices, the Walton family, Walgreens and Blue Cross Blue Shield Venture Partners. The discussion did not establish whether any of those investors would fund a new Holmes venture.

The film prompted debate over how it presents truth and Holmes. Lon said the Del Mar house sequence revealed that Nathan Fielder recreated events with actors, including Amanda Seyfried and Christopher Abbott as Billy, to investigate moments he could not capture on camera. Speakers differed on whether the result was a documentary or docudrama, with one reading it as a story about an untrustworthy narrator and the limits of knowing what happened. Several chose the “Who’s on First” scene as the standout, while another favored the fireplace scene focused on a one-word change. One speaker said the film should win Best Picture; another cited Polymarket odds of about 19% and raised whether Holmes could be eligible for Best Actress.

The diligence debate centered on how investors can test founder claims and how much investigation is reasonable. Speakers recommended having someone use or test a product, while noting that a founder’s words can mean something different from what investors infer. They said diligence should scale with the check: a $25,000 investment does not warrant the same process as a $100 million or billion-dollar bet. One speaker estimated a fund’s “oops, it was fraud” rate at about 1%; another suggested some fraud may be inevitable and floated 2.5%. Sam said he had invested in 350 companies and knew of one fraud case, following a $50,000 check and inadequate reference checks. Strong conviction and chemistry led him to overlook warning signs. Others said investors can suspend disbelief when they want a deal to work, particularly when relying on a trusted VC’s diligence. They contrasted seed investing, where many losses may be accepted for occasional large returns, with growth investing’s greater focus on avoiding losses.

A separate dispute concerned investors’ contractual pro rata rights. Sam Lesson said his firm treats those rights as non-negotiable and would sue to enforce them, after previously yielding under pressure from Sequoia. Jason Calacanis said his firm retains a board-seat option while it owns more than 10%. Isaiah Taylor said Day One Ventures invested $1 million in Valor Atomic’s seed round and $15 million in its Series A, leaving it with less than 5% fully diluted; Valor later sued early investors, including Day One, over pro rata rights. Mascha Butcher said Valor had agreed those rights could not be eliminated without Day One’s consent, then sought a waiver while four of six major investors joined the next round without waiving. Sequoia led Valor’s $1 billion Series B at a $6 billion valuation, which closed August 3; the dispute concerns an amendment the day before closing that removed spring-back rights. Speakers argued that abundant capital has made founders expect less investor pushback and that founders need context on financing terms, not just documents to sign.

The conversation also covered prediction markets, AI voice imitation and other startups. Sam described prediction markets as information machines and advocated a market in everything; Jason suggested consumer options to hedge ski-trip costs when snow is poor, and Sam proposed a “powder-chasing” flight to wherever conditions are best. Jason disclosed that Polymarket sponsors and partners with him and that he is a shareholder, and that he also owns Kalshi shares. On voice imitation, speakers said legal protections for voice and likeness remain unsettled and disagreed about whether an ElevenLabs voice resembling Chris Williamson was inspired by him or merely similar. They also discussed unauthorized advertising use, for which one speaker said they sought a base fee plus 25% of ad spend and settled with one company. Paige cited Knox Metals’ recently announced $25 million in annualized revenue, while Jenny described Electric Plants’ $11 million seed round to analyze plants’ electrical signals.