Lynnise E. Phillips Pantin

Volume 72, Issue 5, 1453-1510

This Article critically examines startup culture and its legal predicates. The Article analyzes innovation culture as a whole and uses the downfall of Theranos to illustrate the deficiencies in Silicon Valley culture, centering on race and class. The Article demonstrates that the rise and fall of the unicorn startup Theranos and its founder, Elizabeth Holmes, is emblematic of the problem with the glorification and pursuit of the unicorn designation for startup ventures. The examination of the downfall of Theranos exposes how investors, founders, and others in Silicon Valley engage with each other in the context of pursuing unicorn status. The saga of Theranos lays bare how the wealthy and the privileged control the private financial markets and underscores the structural inequities within the startup ecosystem. Such a structure promotes certain types of entrepreneurs to the exclusion of others. Diverse and nontraditional entrepreneurs in the startup world face tremendous hurdles to securing financing, mentorship and media exposure. In stark contrast, founders like Holmes benefit from a perception of worthiness drawn from factors such as race, socioeconomic status, pedigree and social connections. This Article examines how the culture of creating the next unicorn has ramifications beyond fraud and risk, but also socio-economic consequences.