Raising hundreds of millions of dollars sends a startup's valuation soaring. It can also make serious prison time all but inevitable for those in Elizabeth Holmes' situation.
of a tough road ahead. Has the tech bubble burst, or is it about to burst? That determination, experts say, is easier made in hindsight.
"What was it that caused Ms. Holmes, regrettably, to make those decisions that she did?" Davila said."Was there a loss of moral compass here?" he said."Was it hubris? What caused that? Was it intoxication with the fame that comes with being a young entrepreneur?"The sentencing guidelines, after a multitude of factors are considered, spits out an offense level. Holmes' level was 33 — 24 points of that was from the amount of money she defrauded.
"She wasn't just an ambitious salesperson who got out over her skis," he said."She did substantial time because it was a gross lie and she had ample opportunities to stop and she didn't."In their court filing to the judge ahead of the sentencing hearing, prosecutors argued that prison time for Holmes was necessary to"deter future startup fraud schemes" and to"rebuild the trust investors must have when funding innovation.
Cohen at Boston College of Law said the boundary between embellishment and criminal fraud does indeed remain fuzzy to most in the tech world, so chances are slim that Holmes' sentence will reverberate in a way that would drastically alter the culture of the industry.
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