![]() I did not know Holmes personally, but her courtroom appearances were carefully orchestrated- including dressing up in serious business attire, walking into the courtroom flanked by her mother and partner Evans. That is also how Silicon Valley works - based on mutual trust, between the CEO, management and investors. ![]() When trust was not in the room, good things did not happen. When trust was in the room, whatever room that was – the family room, the schoolroom, the locker room, the office room, the government room or the military room – good things happened. … I ’m struck that there is one lesson I learned early and then relearned over and over: Trust is the coin of the realm. In an op-ed for the Washington Post in 2020, George Shultz, Regan’s Secretary of States - a Theranos board member, stated, “Dec. Benchmark Capital, a Silicon Valley venture capital firm, got a bad rap for suing Uber ’s ex-CEO Travis Kalanick.īut there are deeper underpinnings of how business is conducted in SV. They understand the difficulties of inventing something new and the risk of implementation. Similarly, Silicon Valley investors do not sue entrepreneurs that they suspect of wrongdoing. Friedman, a partner at VC firm Morrison & Forester in San Francisco. ”It’s rare for the founders of a company to sue their financial backers,” said Paul T. Yet founders disclose their proprietary information, technology and closely guarded strategy, to them, in the hopes of convincing the VCs of their unique proposition, and why they will succeed. VCs do not sign a non-disclosure agreement nor put a non-compete clause when they invest in a startup. Both sides tend to be self-critical when things don’t pan out. One is looking for returns on investment and the other wants to fulfill her promise to herself. The relationship between a poor entrepreneur and a VC with deep pockets is asymmetric. Millions of dollars get made and lost here. Silicon Valley venture capitalists (VCs) and entrepreneurs make an implied contract. Yet, the prosecutors in Theranos case, repeatedly proclaimed, “Elizabeth Holmes refused to let the company fail!” It is the hope, the determination, and to prove that, “The very best founders refuse to give up refuse to let their company die refuse to lose belief in their product and their vision”, per Silicon Valley startup incubator YCombinator. So why do we still keep starting companies here? The cost of failure is emotional and professional - it is not mere statistics. What does it mean when we say 90% of startups fail?Īfter an entrepreneur has staked her pride, her personal life, her prime professional years on a startup, failure is the supreme punishment. Young people’s dreams come true here, but at a cost. With 20 years of experience as a founder/entrepreneur of a technology company in Silicon Valley, raising venture capital and taking my company public, I empathize with Elizabeth Holmes. I have not been able to conclude whether Elizabeth Holmes’ trial should change Silicon Valley or is it an opportunity to tell Silicon Valley’s story and what makes it tick.
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