The fraud trial of Elizabeth Holmes, who based the failed blood testing start-up Theranos, has loads of implications for Silicon Valley.

Her rise and fall has been held up as the final word check of Silicon Valley’s fake-it-until-you-make-it tradition. At some sizzling start-ups, it isn’t unusual for founders to inflate their income or hype their firm’s merchandise to lift cash and safe offers, even when their merchandise might not fairly do what was marketed, stated Margaret O’Mara, a College of Washington professor who has written a guide on the historical past of Silicon Valley.

Ms. Holmes additionally wrapped herself within the mythology of the tech business. The Stanford College dropout styled herself after the late Apple co-founder Steve Jobs, headquartered her firm in Palo Alto, Calif., and benefited from a laudatory media.

The end result of Ms. Holmes’s trial could also be a referendum on that habits, legal professionals and others stated. If Ms. Holmes is discovered responsible, start-up entrepreneurs could also be extra cautious with the claims they make to traders and companions, figuring out that they might be charged with fraud, stated Neama Rahmani, president of the West Coast Trial Attorneys and a former federal prosecutor.

However a “a non-guilty verdict will vindicate a Silicon Valley tradition of celebrating aggressive innovation on the expense of the whole and complete fact,” stated Jeffrey M. Cohen, an affiliate professor at Boston Faculty Legislation College.

Nonetheless, some in Silicon Valley have pushed again in opposition to the concept Ms. Holmes and Theranos represented the everyday start-up. That’s as a result of Ms. Holmes raised the majority of her cash from funding companies that represented rich households, and never conventional enterprise capital companies that usually put money into fast-growing tech start-ups. Ms. Holmes was additionally constructing medical units, not software program as with many different start-ups.

For that motive, Ms. O’Mara stated, some Silicon Valley insiders would possibly dismiss the significance of the result.

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