It will be months before Elizabeth Holmes learns her punishment after being convicted of fraud over the goings-on at her blood-testing startup Theranos.
The 38-year-old entrepreneur, once the darling of Silicon Valley, could face 20 years in prison for each of the four counts on which she was convicted. The sentence is likely to be much lighter.
But the inquest into what the case says about Silicon Valley and the way it does business – and whether they need to change – had begun even before her trial.
Elizabeth Holmes, seen in 2019, faces up to 20 years in prison
The story of Theranos was a textbook tech fairy tale: a dropout from Stanford University with an idea that would change the world and investors pouring in hundreds of millions of dollars in the hope they were backing the latest billion-dollar “unicorn”.
But when the reality of the technology failed to match up with the promises, Holmes maintained a lie to those investors.
The collapse and its consequences were spectacular.
The reality of operating in Silicon Valley is that founders like Holmes have to raise money from investors to get their companies off the ground. To do that, they sell their vision of what the world could look like.
“There is almost endemic to the system a need to, I don’t want to say exaggerate, but to tell a narrative that’s compelling to investors,” said Eric Jackson, a startup founder and author of The PayPal Wars.
“At a certain point hype does have to be in line with credibility, if not you’re in an instance of good old-fashioned fraud.”
The jury decided that Holmes had ended up on the wrong side of the line and, analysts say, could prompt some investors to look more closely at the promises being made.
“What Theranos managed to do was raise a surprisingly large amount of money without really taking the lid off their technology. I don’t think that will fly anymore even in Silicon Valley, where money is lying on the ground,” said Shona Ghosh, senior tech editor at Business Insider.
Theranos founder Elizabeth Holmes and her family leave the federal court after a US jury found Holmes guilty
The Holmes story – once a feature of magazine covers, red carpets, and White House receptions – continues to intoxicate.
A new Hulu drama, with Amanda Seyfried playing Holmes, promises “money, romance, tragedy, and deception”.
Whatever reassessment her fall forces on Wall Street and in Silicon Valley, as billions pour into new ventures, analysts say it is unlikely to signal long-lasting change.
“The sense of bravado and hype and ‘fake it til you make it’ will continue,” said Jackson. “The pressure to do better due diligence will likely increase but I don’t see it being a large cultural shift or even a major shift in business practices in Silicon Valley.”