Before becoming the most significant biomedical fraud in the history of the United States, Theranos was a lovechild of Silicon Valley.
The company was seemingly successfully innovating blood tests by making them cheaper and much more accessible. They claimed their technology needed only 1/100 to 1/1000 of the amount of blood needed in conventional tests. Moreover, their tests were supposedly able to predict the onset of life-threatening diseases. This was exciting news, as healthcare in the US had proven to be one of the harder industries to disrupt, despite being one of the most lucrative.
Equally importantly, in the face of Elizabeth Holmes, the company had a charismatic, 19-year-old Stanford dropout female founder often compared to Steve Jobs - a PR dream for the tech startup media.
Holmes leveraged the media attention she was able to garner to fundraise $1.4 billion for her startup from numerous prominent investors and VC funds, despite the fact that in reality, the innovative technology the company was developing was never functional.
This particular deck was used by Holmes to fundraise $27.5 million for the series C round of Theranos. Here are a couple of lessons we can learn from it:
1. Niche Disruption and Promise
One of the most captivating aspects of Theranos' pitch was its promise to disrupt the traditional healthcare industry. The idea that a few drops of blood could revolutionize diagnostics and bring about early disease detection resonated strongly in a society increasingly obsessed with wellness and preventive care. This disruptive promise not only aligned with the zeitgeist but also showcased a potentially immense market for Theranos' technology, making it an attractive prospect for investors seeking high returns.
This is reflected in the deck - while the presentation is fairly long (24 slides), more than half of the slides deal with how the innovative technology works, and the potential of this technology in financial terms.
2. Burrowed Reputation
In general, it is a great idea to include social validation in your pitch.
Holmes assembled an impressive board of directors that included esteemed figures such as former Secretary of State Henry Kissinger and former Secretary of Defense James Mattis. Even before that Holmes had VC industry veterans on her board, and she showcases that in her deck (slide 4).
These high-profile individuals lent an air of credibility and gravitas to the company, assuring potential investors that Theranos was backed by some of the most respected minds in various fields. This board composition not only attracted capital but also fostered an environment of trust and confidence among stakeholders and new investors.
Moreover, the company was able to generate a fear of missing out in the investors it was pitching to. This pitch deck was used for the series C fundraising round, and on slide 21 you can see a full list of (impressive) investor names that participated in the previous two rounds.
Surely, so many impressive people and companies couldn’t be wrong?
3. What You Say Is More Important Than How You Say It
Objectively speaking, this pitch deck is not overly impressive in its design, structure, or presentation of information. Yet, it did the job of raising money extremely well.
This is because the purpose of a pitch deck is to tell a story. The story is the main factor that determines success. How you present it is also important, but even the most polished pitch deck cannot compensate for a bad story, while a great story can easily compensate for an unpolished deck.
The story of Theranos was almost perfect: A genius young female Stanford dropout has developed an innovative technology that is disrupting one of the most lucrative industries in the world, and some of the most prominent names in the startup field are already backing her.
This is why your first order of business is to get your story straight. Everything would come easier afterward.