Theranos..for Pets!

An investment opportunity, again.

May 16, 2025

I have been told I'm a “seer.” That is to say, I see the future. The tragic part about my gift is that I can only make fun of the future I see. I'll give you some examples. Just the other week, I wrote a satire article about the horrific overreach of the acting US attorney for the District of Columbia, who sent all those dreadfully tone-deaf letters to the editors of journals. I wrote a satirical article. Boom, he's out of the running. Welcome to The Frontier Psychiatrists, a health-themed newsletter.

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Owen is virtually hanging with Elizabeth Holmes, via an intentionally terrible edit.

Well, a couple of years back, I wrote an article about Theranos. Because it's in the category of “bangers only,” I recirculated it earlier this year. The thesis of that article was that Theranos’s investment thesis is still a venture fundable investment. Now, as much as I actually believe that the total addressable market of a disruptive company in the lab testing space could possibly be huge, I intended it as satire, because Elizabeth Holmes, the founder of the company, is quite famously in jail right now for fraud.

A known fraudster should not get funded all over again to run the same blood testing company she pitched the first time. That was intended as completely obvious. Nobody would think Elizabeth Holmes should be allowed to raise money again for the same idea. Except I was completely wrong about this. OK, so it's not explicitly Elizabeth Holmes raising money for the same goddamn idea, she's in jail. It's her husband, who's not in jail. At least, not yet.

He's raising money for a new company, which isn't explicitly Theranos, in that it has a different name, and plans to start in the veterinary space.

Mr. Evans’s company is named Haemanthus, which is a flower also known as the blood lily. It plans to begin with testing pets for diseases before progressing to humans, according to two investors pitched on the company who spoke on the condition of anonymity because they had agreed to keep the plans secret. Mr. Evans’s marketing materials, which lay out hopes to eventually raise more than $50 million, say the ultimate goal is nothing short of “human health optimization.”

Don't worry, he's already raised 3.5 million.

Haemanthus began by soliciting $3.5 million in funding from friends and family and this spring began reaching out to other well-to-do backers in Austin and the San Francisco Bay Area for an additional $15 million, according to the investor materials.

He's already got 10 employees. Now the difference is that he plans to start in pet care, which is less ambitious and plausibly less harmful to humans than Theranos and its predatory fake blood testing on the Edison device. You remember the Edison? It was the tiny box that could do all the blood testing.

Evans has a slightly different idea. It's use lasers. Instead of lots of pipes, it's lasers. But it's still a little box, just like the Edison, except this time with lasers. And of course, with pets initially. So it's definitely different than Theranos. Because— lasers.

As I pointed out in my previous article, none of the things that most of us would consider necessary for success in a company, not trying to do the same thing you're imprisoned wife tried to do previously and went to jail for it. That is regular people thinking!

Instead, logic goes like this:

Venture investors are looking for the answer to one question:
If this founder is able to do what they’re waving their hands about, does it become a fabulously successful billion-dollar-plus company that will have an exit that makes me $50 for every $1 I invest?
It ends up being about market sizing and potential, not probability. This is high stakes poker, and what they are calculating is not whether they will win, but how much they will win. It’s an elaborate exercise in calculating pot odds with a terrible hand.

The thing that matters here is not that it’s a “safe bet”—it’s that, if the bet pays off, it pays off huge. This math has both bigger payoffs and worse odds than roulette. This is from a classic article of mine, quoted below:

Imagine going to Vegas, and gambling on roulette, but only ever being allowed to put 100% of your chips down on one number. People don't do this. Most people bet on black. Gamblers hedge their bets. Even a winning roulette bet would be a bad venture backed business outcome:
A bet on a single number pays 35 to 1, including the 0 and 00. Bets on red or black, odd or even pay 1 for 1, or even money. That is only 35x. —Not good enough.
The odds of winning are 2.70%. This is high for health startups. Unicorns are companies with a valuation of $1b or more.

Theranos was always a big idea with a huge Total Addressable Market. If it succeeded, it would succeed big.

Evans is making even bigger promises than Theranos, if you can believe that (from the Guardian, referencing the Times):

Haemanthus’ marketing materials, reviewed by the New York Times, show that the company’s technology will use a laser to scan blood, saliva or urine from pets and “analyze the samples on a molecular level”. The technology then would require only a matter of seconds to detect illnesses, cancer or infections.
According to the Times’ report, the marketing materials say the Haemanthus’ long-term goals include developing a small, wearable version of the device for humans.

Not just blood, but spit too! Not just the too-small-for-realistic-physics MiniLab, but a wearable device! Get out your checkbooks, investors. This will go big or go home.

If nothing else, Holmes is a founder who just can’t quit. Even in jail for fraud, the family carries the flame for her one true love… implausible testing that raises millions at the expense of vulnerable people and, now, pets.