According to Forbes, Theranos CEO Elizabeth Holmes now has a Net Worth of Zero

What interested me specifically about this: they call out the preferred participating stock. Is it rare? In my experience, not really - not common per se, but not necessarily rare. And being frank, most common stock holders are at a fair disadvantage through growth phases.

I wonder if they apply this type of thinking for other potential-high-net-worth founders, who are likely to have most of their potential-worth tied up in a single organization. Surely this rule about treating the net value of such stock as being very low unless/until there was some kind of public sale or it had otherwise been crystallized somehow means that this type of founder will never feature in the rich list going forwards?

Here is a link :http://www.vanityfair.com/news/2016/06/elizabeth-holmes-net-...

That won't make you turn off your adblocker.

"FORBES spoke to a dozen venture capitalists, analysts and industry experts and concluded that a more realistic value for Theranos is $800 million, rather than $9 billion. That gives the company credit for its intellectual property and the $724 million that it has raised, according to VC Experts, a venture capital research firm. It also represents a generous multiple of the company’s sales, which FORBES learned about from a person familiar with Theranos’ finances."

Wonder how much weight this holds

This is a huge leap to peg her at zero. She might have taken some money off the table in a round. She might have used her stock as leverage with a bank to invest elsewhere, making a decent return on it (though potentially leaving her over-leveraged if the banks call those loans).

If you've got a billion dollars in paper money, I don't see it as far-fetched that you could turn that into a few hundred million of cold, hard cash with some basic financial advice.

"From 4.5 B to Zero" a new book by Elizabeth Holmes. https://twitter.com/aficiomaquinas/status/738079483081547777

I'd imagine she probably took some money off the table in some of those investment rounds. Though no way of being sure, of course..

Classic example of what happens when you don't diversify your investments. High volatility will sometimes drop your net worth to 0.