Whitney Wolfe Herd Just Became the Youngest Female Self-Made Billionaire
Only 22 women have launched and lead their startups to an initial public offering so far. When Bumble, the company behind the titular feminist dating and networking app, went public in February of this year, CEO Whitney Wolfe Herd became the youngest to do so at the age of 31.
Entrepreneurial women face a host of challenges when starting their own businesses. A 2019 Silicon Valley Bank report revealed that only 28% of startups have a female founder, and companies with all-women teams account for under 3% of all venture capital dollars.
The competition is even stiffer for BIPOC women, as ProjectDiane reports that less than 1% of venture capital dollars have gone to Black and Latina founders since 2018. Meanwhile, the pool of female founders in the biotech sector with public IPOs comprises just a handful of women:
- Rachel King founded GlycoMimetics, a biotech company focused on cancer treatment, and took it public in January 2014.
- Lisa Conte founded pharmaceutical company Jaguar Health and took it public in May 2015.
- Jennifer Doudna, recipient of the 2020 Nobel Prize in Chemistry, founded Editas Medicine, a clinical-stage company focused on CRISPR gene editing-based therapeutics, and took it public in February 2016.
- Emily Leproust cofounded Twist Bioscience, a synthetic DNA manufacturer that went public in October 2018.
- In May 2019, cofounder Casey Lynch led the IPO of Cortexyme, a clinical stage biopharmaceutical company that designs therapeutics for Alzheimer’s disease by targeting infectious pathogens implicated in neurodegneration.
- In January 2020, founder Maria L. MacCecchini organized the IPO of her company Annovis Bio, a biotech that ventures beyond the amyloid beta hypothesis to develop drugs for neurodegerative diseases like Alzheimer’s and Parkinson’s.
- Leen Kawas founded and guided the IPO of Athira Pharma, a biotech dedicated to reversing nerve damage in Alzheimer’s, Parkinson’s, and Lou Gehrig’s using regenerative technology, in September 2020.
In recent years, the failures of both Theranos and uBiome, two prominent female-led biotech startups, seemed to cast a dark cloud on the future of female STEM entrepreneurship.
Bad Blood
Back in 2015, the title of world’s youngest female self-made billionaire had been given to Elizabeth Holmes, a woman whose company Theranos (a portmanteau of “therapy” and “diagnosis”) was later charged with “massive fraud” for deceiving investors through false or exaggerated claims about the accuracy of the company’s blood-testing technology.
Donning a black turtleneck reminiscent of Steve Jobs and intentionally speaking in a deeper register to sound more trustworthy, Holmes convinced investors and Walgreens pharmacies alike that her single-drop blood testing technology quickly and accurately delivered results for a wide range of common clinical lab tests. She advertised her company’s tests as a superior alternative for needle-averse patients and assured earlier disease detection.
Whispers of the company’s fraudulent technology were circulating early on, and John Carreyrou of The Wall Street Journal published a scathing expose in 2015 revealing many discrepancies surrounding the accuracy and reliability of the company’s tests. These allegations were later proven true and formed the basis for Carreyrou’s nonfiction book Bad Blood and the HBO documentary The Inventor: Out for Blood in Silicon Valley.
Another One Bites the Dust
Female biotech entrepreneurship seemed to take yet another hit after uBiome, a direct-to-consumer gut microbiome testing company, was forced to declare bankruptcy and sell its assets in 2019 pending an internal FBI investigation into possible insurance fraud. This time, it wasn’t fraudulent testing on trial but fraudulent billing practices.
Initially, uBiome offered customers the option to have their gut microbiomes sequenced through a kit called uBiome Explorer. Later down the line, uBiome tried to expand into the clinical realm by offering a gut pathogen detection test known as uBiome SmartGut, a test that required doctor approval and was usually covered by medical insurance.
When patients requested a SmartGut test, uBiome would often send six test kits instead of one and billed insurance for all of them. The company would also “upgrade” patient samples, often without the patient’s knowledge, and bill insurance again for the resequencing cost. Doctors working at the company were frequently pressured to indiscriminately approve these tests.
Forging a New Path Forward
In 2021, founders Jessica Richman and Zachary Apte were charged with money laundering and conspiracy to commit securities and health care fraud. The maelstroms surrounding uBiome and Theranos have given emerging female founders cause to actively distance themselves from these negative narratives.
Crystal Icenhour, CEO and co-founder of the medical testing company Aperiomics (Aperio is Latin for “reveal”), a precision medical biotechnology company focused on infection detection, laments that the Theranos story follows her during fundraising and promotional ventures:
“It’s really frustrating. Theranos has done a huge disservice. Anything we can do to differentiate ourselves, we do it.”
To assure doubters of her legitimacy, Icenfour also draws attention to her credentials, which include a PhD in Pathobiology and Molecular Medicine from the University of Cincinnati Medical School and fellowships at Duke Medical Center and the Mayo Clinic. Holmes was a Stanford dropout.
Do Your Homework
Why do disasters like Theranos and uBiome happen, and how can we avoid them in the future? Some argue that preventing health tech debacles is a matter of more rigorous medical diligence.
Investors often don’t have the necessary skills to properly vet out the companies they seek to fund. In the case of Theranos, the board of investors consisted of several political, federal, and military figures, the likes of which included George P. Shultz, Henry Kissinger, and Sam Nunn, none of whom had any biomedical training.
To make up for lack of investor knowledge, the due diligence process usually includes accountants, lawyers, and medical industry professionals. But too often, investors rely on their associates instead. Third-party market viability assessments could go a long way towards bridging the gap.
A Social Conscious
Calls for greater transparency and social responsibility in the private sector are as relevant now as ever. When a female user was bullied on the Bumble app and made her personal exchanges public, Wolfe Herd and her team publicly addressed the issue in “An Open Letter to Connor,” in which they explicitly outlined their zero-tolerance policy for misogyny on the platform.
Wolfe Herd and her team also partnered with lawmakers in Texas to successfully pass a bill making it illegal to send lewd images over the internet. The Texas law took effect in September 2019 and classifies the sending of unsolicited explicit pictures as a misdemeanor punishable by a fine of up to $500. Bumble has also proposed similar legislation in the state of California.
Why do efforts like these matter? Millennials and Gen Z consumers, in particular, are more likely to invest in companies considered to have a conscience, to take a pay cut in order to work towards an important purpose, and to pay higher prices for responsibly produced products.
Writing for The New York Times, columnist Nicholas Kristof explains, “Doing good is no longer a matter of writing a few checks at the end of the year, as it was for my generation; for many young people, it’s an ethos that governs where they work, shop and invest.”
A 22-year-old student in New York City echoed and elaborated, “What I understand is actual commitment to something. One thing I get really turned off by is when it appears that what [companies] are trying to promote or what they are saying is not aligned with their actions. Commitment, action, follow-through, and transparency matter to me.”
Younger consumers have a number of concerns, including economic development, job creation, health and education, women’s and LGBTQ+ rights, racial equality, immigration, gun control, and climate change. Companies that prioritize these concerns through corporate social responsibility (CSR) programs will achieve greater success with these generations.
The success of Wolfe Herd and the efforts made by her team to ensure more equitable online spaces should encourage young women and remind everyone else that females are both competent and capable. Any entrepreneurial accomplishments we achieve, in STEM fields or otherwise, need not be the result of deception but persistence and dedication.
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