A pregnant Elizabeth Holmes has been sentenced by a judge to eleven years in prison. With this ruling, one of the most notorious fraud cases in recent years comes to an end.

The American founder of biotech company Theranos, Elizabeth Holmes, was sentenced Friday by a San Jose (California) court to 11 years in prison for defrauding investors. The sentence marks the end of one of the most notorious fraud cases in recent US history.

Between 2013 and 2015, the 38-year-old Holmes convinced a group of prominent investors to put more than $700 million into Theranos. Holmes claimed to have developed a device ("Edison" – named to a great inventor, just like Apple’s Newton) that could perform dozens of health tests using just a few drops of blood from a patient's fingertip. The judge found it proven that because of Holmes' actions, investors had suffered at least $121 million in damages.

Theranos' device - a box the size of a coffee maker - did not actually work. Holmes and her business partner Ramesh Balwani - also convicted of fraud in July - falsified test results to make investors believe that a new medical revolution was on the horizon with Theranos. Employees and journalists who tried to publicize the lies were intimidated by Holmes and Balwani. The duo also lied about contracts they allegedly signed with customers.

Holmes founded Theranos in 2003, as a 19-year-old student at Stanford University. As "the new Steve Jobs," she landed on the covers of business magazines Fortune and Forbes. She also managed to convince a string of celebrities, including former U.S. Secretary of State Henry Kissinger and media mogul Rupert Murdoch, to invest money in her company. At its peak, Theranos was worth $9 billion and Holmes was crowned the world's youngest self-made billionaire by Forbes. But after The Wall Street Journal exposed wrongdoing within the company in 2015, Theranos went bankrupt in 2017.

Holmes mainly wanted her lies to buy time for her device to still work, it turned out during the trial. According to prosecutors, Holmes had been "blinded by ambition" as a young entrepreneur. In court Friday, the woman said she regretted her mistakes "with every cell in my body. It is still unclear whether she will appeal.

Fine line between bold entrepreneurship and scam

Holmes' conviction is a direct warning about Silicon Valley and the fake it till you make it culture among fledgling tech companies. Thereby, young entrepreneurs looking for growth money present their companies with a hefty dose of bluster as the new Google or Facebook. There is a fine line between pretending the truth and deliberately lying to investors.

Holmes has become the symbol of start-up madness, with billions of dollars sometimes flowing in recent years to charismatic founders of companies that had barely proven anything. That period is over. With interest rates rising and stock prices falling, investors are looking much more critically at the business models of start-ups. Burning money purely to grow has given way to cost-cutting and working toward profitability.

In her defense, Holmes herself consistently pointed to the responsibility of investors, who should have kept her from making mistakes. The lawsuit showed that investors hoped so strongly that Holmes could become a female role model in a male tech world that critical voices were ignored.

Elizabeth Holmes-syndrome

Elizabeth Holmes, as a former female role model, has done significant damage to the very women in the tech world. There is even talk of the Elizabeth Holmes syndrome in judging women entrepreneurs.' At the same time, in the aftermath of the Holmes case, other entrepreneurs no longer seem to get away with such practices. Sam Bankman-Fried, the founder of the recently bankrupt crypto marketplace FTX, which saw 32 billion book value evaporate within days, is currently the subject of a judicial investigation. And last month, Trevor Milton - founder of hydrogen truck maker Nikola - was convicted of defrauding investors. Among other things, Milton had used a video of a prototype of his truck driving through the desert at a brisk pace. It was later revealed that the truck was simply rolling down a hill during the recording.

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