(Bloomberg) — Elizabeth Holmes took the witness stand to start telling jurors her side of the story in a criminal fraud trial that has gripped Silicon Valley, ending suspense over whether the Theranos Inc. founder would dare to testify hours after the government rested its case.

Holmes at first appeared nervous before removing her virus mask, but she quickly relaxed and proved eager to talk Friday afternoon as she fielded questions from one of her attorneys about the origins of her blood-testing startup. Over the last 10 weeks, prosecutors have portrayed her as deeply deceptive in a scheme that allegedly defrauded investors of hundreds of millions of dollars and endangered patients with inaccurate lab results. 

Based on the strength of the government’s case, some legal experts have said Holmes had little choice but to try in person to convince the jury of eight men and four women that she is not guilty of crimes that could send her to prison for two decades. She continues testifying Monday.

It’s rare for white-collar defendants to testify because prosecutors have wide latitude to ask them questions about the behavior, choices, conversations and motivations that gave rise to the crimes they’re charged with. 

For Holmes it’s especially precarious because there are so many avenues for prosecutors to trip her up on the stand. One example: Why did she tell so many potential business partners and investors that Theranos analyzers were adopted by the military and deployed on the battlefield when it wasn’t true?

Early in her testimony, it was unclear if the 37-year-old mother of a baby boy born in July will pursue the risky and unprecedented defense in a corporate-fraud prosecution that she was abused and controlled by the company’s president, Ramesh “Sunny” Balwani, during the years that they were romantically involved.


Holmes’s lawyers attempted to reset the government’s narrative by trying to reestablish her credibility as an innovative and hard-charging entrepreneur.

She introduced herself by telling the jury about her brief time as an undergraduate before she dropped out of Stanford University in her sophomore year. She immersed herself in the rarefied fields of fluid dynamics and nanofabrication, befriended a chemical engineering professor and worked on a patent application stemming from an idea for a pill that could deliver antibiotics based off communications with a hand-held device. 

She first called her company “Real Time Cures” before changing its name. Holmes explained that she structured the startup around three areas: chemistry, hardware and software.

Holmes also described her initial foray into raising money for the company in 2005 through heavyweight venture capitalist Don Lucas and her early efforts to partner with pharmaceutical giants, including landing a contract with GlaxoSmithKline Plc in 2006.

In a bid to deflate testimony from government witnesses that Holmes lied about having secured Big Pharma endorsement of her technology, her lawyer sought to demonstrate transparency by having her explain why she offered an early potential investor contact information at Pfizer Inc.

“I thought that the people we were working with in the pharma companies could explain the impact and potential” of our company, Holmes testified.


Theranos peaked at a valuation of $9 billion in 2014 before reporting by the Wall Street Journal and regulatory scrutiny drove it into ruin by 2018. That same year, Holmes and Balwani were charged with conspiracy and wire fraud. Balwani, who will be tried separately next year, has pleaded not guilty and has denied the abuse allegations.

Jurors in federal court in San Jose, California, already have heard testimony from more than two dozen government witnesses, and have been showered with documents, emails, video clips and audio recordings of Holmes. The government dropped one of 12 counts against her after U.S. District Judge Edward Davila disqualified testimony from a patient witness.

Prosecutors have argued that Holmes dazzled partners and investors with the expectation they would partake in — and reap the profits from — a revolution in health care, even as she knew her blood analyzers were a failed technology.

Holmes’s central defense, as laid out by her lawyer in September opening arguments to the jury, is that she tried her hardest for 15 years to make the company succeed, but “coming up short is not a crime.”

(Updates with risk of white-collar defendant testifying.)

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