// STARTUP COMPARISON
Theranos vs FTX
Theranos failed in 2018 due to Fraud. FTX failed in 2022 due to Fraud. Both failed for the same reason — Fraud.
| METRIC | 🔥 Theranos | 🔥 FTX |
|---|---|---|
| Sector | Biotech | Web3 |
| Country | USA | USA |
| Founded | 2003 | 2019 |
| Died | 2018 | 2022 |
| Raised | $945M | $1.8B |
| Peak | $9B valuation | $32B valuation |
| Primary Cause | Fraud | Fraud |
| Flame % | 🔥 98% | 🔥 95% |
// WHY EACH FAILED
🔥 Theranos
Fraud
Theranos failed because its Edison blood-testing device never worked. The company raised $945M while falsifying results using conventional machines. A 2015 Wall Street Journal investigation by John Carreyrou exposed the fraud. Elizabeth Holmes was convicted in January 2022 and sentenced to 11 years in prison.
// LESSON
The product must work. "Fake it till you make it" ends at the FDA boundary. No amount of narrative replaces a working device.
The product must work. "Fake it till you make it" ends at the FDA boundary. No amount of narrative replaces a working device.
🔥 FTX
Fraud
FTX collapsed in November 2022 when CoinDesk revealed that Alameda Research held most assets in FTT token. A bank run followed. $8B in customer funds were missing. Sam Bankman-Fried was convicted in November 2023 and sentenced to 25 years in prison.
// LESSON
Customer funds are not operating capital. This is accounting 101, not a crypto insight. The collapse was a fraud problem, not a crypto problem.
Customer funds are not operating capital. This is accounting 101, not a crypto insight. The collapse was a fraud problem, not a crypto problem.
// IN THE SIMULATION
In UnicornBurn Season 0, Theranos triggers PRODUCT_VALIDATION_FAILURE before reaching Seed round. The simulation validates product claims before unlocking funding rounds — unlike Theranos investors.
FTX triggers CUSTOMER_FUNDS_MISMATCH at the first liquidity event. The simulation tracks segregated customer funds as a hard constraint — not a suggestion.
// EXPLORE FURTHER