You can bet that last round put a claim on a huge percentage of the liquidation proceeds, it was basically DIP financing.
Was being rhetorical because she being a uni dropout having not accumulated any wealth from any prior working experience would have no means to support herself, and so there would have definitely been a setup where she earned a base salary to pay the bills on top of stock options. But according to the SEC filing, she was paid a "salary of approximately $200,000 to $390,000 per year between 2013 and 2015". Seeing as image appears to be important, turtle neck and all, along with the evidently really nice Theranos HQ, I'd assume befitting of sustaining such well to do aura, you'd need to own a nice mansion and drive a nice car on top of that. I can't imagine years and hundreds of millions of dollars in funding, that at least a few mil couldn't be squeezed via executive compensation of sorts for personal riches. Is Draper still defending her? Seems to be big on crypto currencies now.
You would know better but I was told by another Silicon Valley guy that it’s common for vc’s to ask founders to take some money off the table : enough that they won’t make short term decisions that can affect the long term opportunity of the business.
That may be the case for exactly the reason you articulated, i.e. your CEO is taking on credit card debt to pay their kids Stanford tuition and it's distracting them from running a billion dollar company or incenting them to push for a suboptimal early sale, but it's pretty rare. More common to exercise the right of first refusal and co-sale terms to allow an employee who has left to sell their shares to the existing investors, although it's usually easier to just cram them down in a subsequent round since the investors have their own share class and they can just issue additional ordinary shares to remaining employees to make them whole. Bottom line, though, is that in the valley the CEO doesn't get a payout until their investors do. In fact the onus is on a founder to prove to investors that they shouldn't be replaced by a professional CEO post-funding and more often than not they are eventually, so the CEO job isn't even assured let alone an early liquidity event just for the CEO. For a college drop-out with no pre-existing wealth to be living in a mansion would be seen in an extremely poor light to the point that it would jeopardize future funding rounds. It's not uncommon to get a lot of perks, private jet flights, a driver, any technology you might want, expensive dinners with clients...because those can all be justified as directly contributing to productivity that benefits the investors. But building personal wealth for the founder, not so much.
Her family is rich and politically connected. She is a childhood friend of Draper's daughter, that explains the investments and defense.
Actually her dad was civil service at USAID and her mom was a staffer in DC specializing in defense and foreign policy. Neither of those pay particularly well and aren't particularly amenable positions to become politically connected at a high level, especially in the VC world, although I know the conspiracy folks are spinning it into all kinds of that. Even the whole thing about her being "childhood friends" with Draper's daughter strains credulity. She lived in Houston from the age of 9 and DC before that. Draper and his family lived in Silicon Valley that entire time. I'm guessing they became friends while doing a summer language camp together at Stanford in high school, with the only contribution from her parents being the ticket to send her to the camp. Which is a whole different thing from the implication that her parents were friends with Tim Draper and they went on playdates as kids. Holmes is a liar and a thief, but she's also exceptionally good at selling herself and her company, from the time she was in high school. I don't think the former diminishes her skill at the latter, and implying that she got where she was because of her parents actually significantly underestimates her and her ability to do further harm (and overestimates some vast DC/Silicon Valley complex that simply doesn't exist). In fact, come to think of it aren't we potentially looking for a new HHS Secretary given that the current one did such a poor job lying about the $30,000 dining set for his office? I see a bright future for young Elizabeth! Oh, sorry, wrong agency. Turns out I they already replaced that corrupt official, she missed her shot.
And yet Kalanick, even though he is now out of managing Uber, was reported to be tendering his shares over to softbank well before an IPO for more than a billion dollars. https://www.bloomberg.com/news/arti...-kalanick-is-said-to-plan-sale-of-29-of-stake In terms of being frugal, I remember Bezos being famously frugal even post IPO, until recently. There was a 60 minutes interview of him during the dot-com era, where he was already a legit minted billionaire, but was still driving around in an old car and Amazon offices were nothing to write home about. This all changed of course. He dresses different and the company got an expensive HQ and all, but back then he was pretty frugal. This seems to be based on personality though. I can't imagine someone who cared so much about image to others and image to self, that they wouldn't at least live a comfortable life with a nice house and car etc. $390K salary is a good salary anywhere. Certainly I'd imagine there is at least an existing mortgage on a pretty good house in a pretty good neigjhborhood right now, even despite all this mess. The fact the fine was $500K means it was tailored so she could pay it. Has to be millionaire status right? Couldn't possibly be bumming it in a crappy apartment and driving a crappy beater. I don't see it.
I know you can't believe it until you live there, take a gander on Zillow for Palo Alto. Here's a random selection for you, 2100' rancher from the 70s, dated and a bit ugly, $2.9M (https://www.zillow.com/homedetails/878-Miranda-Green-St-Palo-Alto-CA-94306/19524026_zpid/). And that's not out of the ordinary at all, anywhere on the Peninsula. That's $130K on your mortgage alone, plus come up with a $580K downpayment. When I lived in Palo Alto we were paying $50K a year for childcare for our 2 kids, and that was at subsidized school child-care that we were lucky to get into because all the rest of the childcare within a 30 minute radius had a 2 year plus waitlist, and was more expensive. Again, I don't blame you if you are calling BS on this, but it's insanely expensive beyond what you can believe even when you live there, and that's without trying to look like you're a successful CEO. So $390K is enough to get you what $100K gets you in FL, or VA, or even what $150K gets you in HI having lived in all those places. It's not chump change, but I guarantee there's no "wealth" there. The Kalanick story is true, and in fact I also exited my first company by selling my shares to our investor, so it's not unprecedented. It's just rare. Not anything approaching Bezos' level of success but I do still have my car with 150,000 miles on it and live in the same house, in my experience wealth is far more valuable for the freedom it gives you than the stuff it buys.
A good book to read is Chaos Monkey. Draper’s father was one of the original VC’s and was appointed to run Import/Export bank by George Bush 1. His sister was in the show 30something If anyone remembers that.