An “ardently resilient optimist.” Curious. Thoughtful. Determined to change the world. A desire to serve.
These are the words that will ring like sirens in your ears if you read aloud the 82-page document filed by Elizabeth Holmes’s attorneys late last week ahead of her sentencing, which is scheduled for this Friday morning. These words seem to jump off the page and catch in your throat. Perhaps this is because we have seen how Theranos played out—all the way from the cover of Fortune to the trial stand. Perhaps because we have seen or read so much that even the name “Elizabeth Holmes” triggers our deepest sense of skepticism and disbelief—rather than the trust the founder had once instilled in so many.
As Sam Bankman-Fried’s sprawling crypto empire was crumbling in a mere 48 hours last week, I was on vacation, sitting on the beach and reading Stephen King’s Salem’s Lot—absorbed in a world where red-eyed vampires are plucking off the gossipy residents of a small town that was none the wiser for it.
Silicon Valley is no Stephen King novel. In King’s stories, there are villains and there are heroes. Monsters are monolithic, self-pleasing, and blood-loving evil beings who can’t manage to scrape up even a page of reader sympathy. No, this is our very-real, vampire-free reality, where people are complex and nuanced, where individuals are shocked to learn they have been misled, where a judge must decide the fate of a founder who has become a poster child of startups-gone-wrong after a slew of various, and sometimes conflicting, testimony.
And in this nuanced world, and especially that of venture capital, there seems to sometimes be a blurry line between charisma and trickery, between lofty projections and lies, between optimism and fraud. That is until the money suddenly vanished.
In the aforementioned 82-page filing, Holmes’s attorneys, in an attempt to limit the prison sentence of the now-ostracized ex-CEO of Theranos, asked the judge not to look at Holmes as merely a “caricature in extensive and intrusive media portrayals,” and reminded him to see her company through the lens of, not the public markets, but the venture capital-backed startup world where she operated.
“That is the environment in which Theranos was founded, in which it was built, and in which investors decided whether and how much to invest,” her attorneys wrote.
And that Silicon Valley, they point out, is one where Adam Neumann, who “was accused of diverting millions of corporate assets for personal gain and walked away from his first company with hundreds of millions of dollars,” received a $350 million investment in his next venture. That Silicon Valley, as they point out, is one where venture capitalists sometimes make investments based on FOMO or hype (Holmes’s lawyer cites Sam Bankman-Fried for this one). That Silicon Valley, they point out, is one where women founders are told their visions aren’t bold enough. That Silicon Valley, they point out, is one where startup CEOs are “called upon to strike the incredibly difficult balance between painting a picture of the world as it could be, and as it actually is.” That Silicon Valley, they point out, is one where not all investors conduct extensive due diligence or look at the same information.
And this is also a world in which an “ardently resilient optimist” can actually do a lot of damage. This is the world where a venture capitalist who carefully considers the cost of success may not carefully consider the cost of failure.
We may not be in a Stephen King novel (thank God), but there is something eerily familiar in the everyday passerby characters who may have discovered they were living among vampires had they asked the right question, had they opened that closet door, had they told their neighbor something smelled a little funny, right at the moment they smelled that little funny-something.
Instead, the townees went on as if nothing was happening at all, as if the sudden disappearance or deaths of their neighbors was a one-off, as if the very acknowledgment that vampires may be walking among them was more dangerous than if they actually were.
Please note…There were, regrettably, two errors in yesterday’s newsletter. The online version has been corrected to reflect that 9.7% of the total AUM of one of Multicoin Capital’s funds were held at FTX, not of the firm’s total AUM. Additionally, the story was updated to correct that Hard Yaka was not an investor in Race Capital’s fund. A spokesperson for Hard Yaka confirmed prior to publication that Hard Yaka was an investor in the fund, but later informed Fortune they were mistaken.
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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