embraced by many in the tech industry. “This is what happens when you work to change things,” she said in a TV interview. “First they think you’re crazy, then they fight you, and then all of a sudden you change the world.”

In the years since Theranos collapsed, more tech start-ups have followed its strategy of looking outside the small network of Sand Hill Road venture capital firms for funding. Start-ups are raising more money at higher valuations, and deal-making has accelerated. Mutual funds, hedge funds, family offices, private equity funds and megafunds like SoftBank’s Vision Fund have rushed to back them.

Mr. Salehizadeh said Silicon Valley’s shift to a focus on fund-raising over all else was one reason he had left to set up a private equity firm on the East Coast. The big money brought more glitz to tech start-ups, he said, but it had little basis in business fundamentals.

“You’re always left feeling like either you’re an idiot or you’re brilliant,” he said. “It’s a tough way to be an investor.”

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A Day in the Life of a Reporter Covering the Elizabeth Holmes Trial

During the third month of the fraud trial of Elizabeth Holmes, the founder of the blood testing start-up Theranos, Judge Edward J. Davila, who is presiding, called the proceedings “a movable feast.”

We were about as far away from Hemingway’s Paris as I could fathom. The judge was most likely not talking about eating and drinking his way through 1920s France; the phrase “movable feast” also describes an event with a flexible date. But the image put the lack of glamour of covering this trial into relief.

Reporting on the tech industry and its immense wealth and power sometimes affords a glimpse into opulence: a dinner at a European palace, for example, or a crypto yacht party. But during this trial, I spent much of my time sitting on the carpeted floor of the courtroom’s hallway, downing snack bars and writing stories on my laptop.

Four months of covering Elizabeth Holmes’s fraud trial, now in its second week of jury deliberations, has turned me into a nocturnal, sidewalk-dwelling human-shaped snack bar.

fans of white-collar crime” who simply want to see history unfold.

One morning outside the courthouse, a group of spectators pretended to sell black turtlenecks — Ms. Holmes’s uniform during Theranos’s rise — as a bit of performance art. They were scolded by court security guards for soliciting on federal property. Another time a woman yelled “You’re a good mom!” to Ms. Holmes as she entered the building. She was scolded by Judge Davila for potentially influencing the jury, whose members use the same door as the public.

Snagging a seat means getting there early. Each day since Ms. Holmes took the stand in late November, I jolt out of my hotel bed around 3 a.m. in a panic. I get ready, then hustle past a San Jose Christmas market that, just hours earlier, was buzzing with lights, people and festivities.

Credit…Erin Griffith

Then I join the group of journalists and spectators gathering outside the courthouse to receive a number, denoting our place in line — entry into the courtroom is first come first served — and sit on the cold sidewalk in the dark, waiting for 5 a.m., when the nearby Starbucks opens. Around 6:20 a.m., the gates to the courthouse unlock and we form a proper line. Around 8 a.m., Ms. Holmes arrives. An hour after that, I take my seat in the courtroom. (A few times, I’ve been relegated to a small overflow room, which also fills up fast.)

prompted the judge to warn journalists to type quietly.) There were tarot cards on one day and a panettone on another. The most critical gear is snacks.

When court is in session I sit in the gallery, hunched over my laptop, barely moving except for my fingers. But my brain is in five places at once, tap-dancing, spinning, back-flipping, walking a tightrope and doing the worm. I’m trying to take fast and accurate notes (quietly) while also sending instant messages to my Times editor, Pui-Wing Tam, (quietly), sending tweets (quietly), posting live updates on the trial for The Times (quietly), emailing outside sources for quotes (quietly) and writing my story in time for our East Coast deadline.

Not every day in court has been as newsworthy as when the defendant took the stand, so our coverage ranges from high-level weekly summaries to minute-by-minute live updates. Big witnesses, like James Mattis, a Theranos board member and former defense secretary, get their own story, as do big themes, like Theranos’s use of the media or the lack of investor due diligence. Our reporting fellow, Erin Woo, has been critical to our coverage. We write background summaries in advance so we can file quickly after adding quotes and analysis from the day’s events.

There are no windows in the courtroom, and by the time we leave the building more than 12 hours after arriving, the sun is going down. Then we do it all again.

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Elizabeth Holmes Begins Her Defense in Fraud Trial

SAN JOSE, Calif. — For the past 11 weeks, prosecutors revealed emails from desperate investors. They held up falsified documents side by side with the originals. They called dozens of witnesses who lobbed accusations of deceit and evasiveness.

And on Friday, the person whom prosecutors have been making their case against — Elizabeth Holmes, the founder of the failed blood testing start-up Theranos — took the stand to defend herself. She faces 11 counts of defrauding investors over Theranos’s technology and business in a case that has been billed as a referendum on Silicon Valley’s start-up culture. She has pleaded not guilty.

tech industry’s hubris and the last decade’s culture of grift — began her testimony by answering a series of questions about Theranos. She delved into her background and how she began the Silicon Valley start-up, which had promised to revolutionize health care by using just a drop of blood from patients to deduce their illnesses.

trial finally began in September, prosecutors called former investors, partners and Theranos employees to testify. Jim Mattis, the retired four-star Marine Corps general and former defense secretary, who was a Theranos director, took the stand, as did a former Theranos lab director who endured six grueling days of questioning. In one surreal moment, a forensics expert recited text messages between Ms. Holmes and Ramesh Balwani, her boyfriend at the time and business partner at Theranos, who is known as Sunny.

This week, Alan Eisenman, an early investor in Theranos, testified that Ms. Holmes cut him off and threatened him when he asked her for more information about the company. Yet even after that treatment, Mr. Eisenman poured more money into the start-up, believing its seemingly fast-growing business would deliver riches to backers like him.

When asked about his understanding of the value of his Theranos stock today, Mr. Eisenman said: “It’s not an understanding, it’s a conclusion. It’s worth zero.”

a series of validation reports that Ms. Holmes sent to potential investors and partners that made it look as though pharmaceutical companies including Pfizer and Schering-Plough had endorsed Theranos’s technology. Representatives from each company testified that they had not endorsed Theranos’s blood test and were surprised to see their companies’ logos added to the report.

testified that the start-up faked demonstrations of its machines for potential investors, hid technology failures and threw out abnormal blood test results.

Mr. Mattis testified that he was not aware of any contracts between Theranos and the military to put its machines on medevac helicopters or on the battlefield, as Ms. Holmes had frequently told investors.

testimony from Roger Parloff, the journalist who wrote a magazine cover story about Ms. Holmes, helping propel her to acclaim. Mr. Parloff’s article was sent to numerous investors as part of Ms. Holmes’s pitch.

Yet notably absent from the courtroom were some of the most prominent witnesses on the prosecution’s list. Ms. Holmes’s rise was aided by her association with business titans such as the media mogul Rupert Murdoch, elder statesmen such as Henry Kissinger and Adm. Gary Roughead, and the lawyer David Boies. Theranos was felled, in part, by whistle-blowers such as Tyler Shultz, a grandson of George Shultz, the former secretary of state, who sat on Theranos’s board. None of them testified.

Also absent was Mr. Balwani, who was charged with fraud alongside Ms. Holmes and faces trial next year. His role as a fiery defender of Theranos who went after anyone who questioned the company has been in the background of much of the testimony.

At nearly every turn, Ms. Holmes’s lawyers sought to limit testimony and evidence. They attacked the credibility of investors, using legal disclaimers to show that investors knew they were gambling on a young start-up. The lawyers also poked holes in investors’ limited due diligence on Theranos’s claims. At one point, they directed Erika Cheung, a key whistle-blower who worked in Theranos’s lab, to read the entire organizational chart of the people employed in lab to show she played a small role in the overall operation.

she said in one of the videos. “Anything that happens in this company is my responsibility.”

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Elizabeth Holmes Trial Exposes Investors’ Lack of Due Diligence

SAN JOSE, Calif. — In 2014, Dan Mosley, a lawyer and power broker among wealthy families, asked the entrepreneur Elizabeth Holmes for audited financial statements of Theranos, her blood testing start-up. Theranos never produced any, but Mr. Mosley invested $6 million in the company anyway — and wrote Ms. Holmes a gushing thank-you email for the opportunity.

Bryan Tolbert, an investor at Hall Group, said his firm invested $5 million in Theranos in 2013, even though it did not have a detailed grasp of the start-up’s technologies or its work with pharmaceutical companies and the military.

And Lisa Peterson, who handles investments for Michigan’s wealthy DeVos family, said she did not visit any of Theranos’s testing centers in Walgreens stores, call any Walgreens executives or hire any outside experts in science, regulations or legal matters to verify the start-up’s claims. In 2014, the DeVos family invested $100 million into the company.

The humiliating details of bad investments like Theranos are rarely displayed so prominently to the public. But they have been laid bare in recent weeks at the trial of Ms. Holmes, 37, who faces a dozen counts of wire fraud and conspiracy to commit wire fraud; she has pleaded not guilty. She and Theranos fell from grace — with investor money evaporating and the company shutting down in 2018 — after claims about its blood-testing technology were shown to be false.

frenzied state of record-breaking fund-raising.

With so many new investors flocking to start-ups, due diligence is sometimes so minimal that it is used as a punchline, investors said. An overheated market “definitely creates an environment for people to make more inflated claims” and may even tempt them to lie, said Shirish Nadkarni, a longtime entrepreneur, investor and author.

During its lifetime, Theranos exemplified that dynamic. The company raised $945 million from famous venture capitalists including Tim Draper, Donald Lucas and Dixon Doll; wealthy heirs to the founders of Amway, Walmart and Cox Communications; and powerful tech and media moguls such as Larry Ellison and Rupert Murdoch.

And as investors have testified at Ms. Holmes’s trial, a central tension has emerged around due diligence. Could these investors have avoided disaster if they had simply done better research on Theranos? Or were they doomed because their research was based on lies?

added pharmaceutical company logos to validation reports indicating the pharmaceutical firms had endorsed its technology when they hadn’t, according to evidence and testimony. Theranos also claimed in late 2014 that it would bring in $140 million in revenue that year when it had none, according to evidence and testimony. The start-up also faked demos of its blood-testing machines to investors, witnesses have testified.

Wade Miquelon, the former chief financial officer of Walgreens, to admit that he didn’t know if his company had ever gotten one of Theranos’s devices in its offices for testing before entering into a partnership. The lawyers also got Mr. Mosley to concede he never directly asked Ms. Holmes whether a pharmaceutical company had written the validation report.

The strategy has sometimes veered into condescension. That was evident last week when Lance Wade, a lawyer for Ms. Holmes, asked Ms. Peterson, an investment professional, if she was familiar with the concept of due diligence.

“You understand that’s a typical thing to do in investing?” he said.

The investors have pushed back, explaining that they were acting on false information supplied by Ms. Holmes.

“You’re trying to measure our sophistication as an investor when we weren’t given complete information,” Ms. Peterson said. Mr. Wade asked the judge to strike the comment from the record.

Still, testimony from pharmaceutical company executives who interacted with Theranos showed it was possible to see through at least some of Ms. Holmes’s grandiose claims.

Constance Cullen, a former director at Schering Plough, said this week that she was responsible for evaluating Theranos’s technology in 2009. She said she came away “dissatisfied” with Ms. Holmes’s answers to her technical questions, calling them “cagey” and indirect. She said she stopped responding to emails from Ms. Holmes.

Shane Weber, a director at Pfizer, looked into Theranos in 2008 and concluded that the company’s responses to his technical questions were “oblique, deflective or evasive,” according to a memo used as evidence. He recommended Pfizer cease working with Theranos.

But investors were less probing, especially when Ms. Holmes appealed to their egos. Her persona as a visionary, bolstered by magazine cover stories and personal eccentricities, created a sense that backing Theranos was an exclusive and elite opportunity.

In testimony and evidence, Ms. Holmes was shown to have guarded information about the business, calling it a trade secret. She told investors she sought out wealthy families who would not want to see a return on their investment anytime soon, making those that she picked feel special with formal invitations. And she controlled the company tightly with “supervoting” shares worth 100 times the power of other shares.

“She has a firm grasp on the company, let there be no mistake,” Christopher Lucas, a Theranos investor, said on a call with other investors that was recorded and played in court. “She would have the right to cast out investors.”

Mr. Lucas’s firm, Black Diamond Ventures, invested around $7 million into Theranos, despite not getting access to its financial information or examining all of its corporate records. This was unusual, Mr. Lucas testified on Thursday, but Ms. Holmes told him the information was sensitive because a leak could “give competitors a chance to crush the company.”

That secrecy extended to due diligence. Ms. Peterson testified that she was scared Ms. Holmes would cut her firm out of the deal if they dug deeper into the details of Theranos’s business.

“We were very careful not to circumvent things and upset Elizabeth,” she said. “If we did too much, we wouldn’t be invited back to invest.”

Mr. Nadkarni, the longtime investor, said such behavior sounded familiar. He said he had observed a loosening of diligence in deals he’s been involved with over the last year.

It hasn’t led to many problems while times were good, he said, but “if something happens to the economy, then everyone is going to be toast.”

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They Still Live in the Shadow of Theranos’s Elizabeth Holmes

Women at tech start-ups wrote to her thanking her for saying what they had been feeling, Ms. Esponnette said.

Lola Priego, 30, the founder of Base, which offers at-home blood and saliva tests that are processed at traditional labs, hears a Theranos comparison at least once a week, she said. The references come directly or indirectly from potential partners, advisers, investors, customers and reporters, she said.

She said she understood the need for skepticism, since new health care companies should be looked at critically to prevent malpractice. Often the comparisons stopped after people learned that Base works with Quest Diagnostics, a multinational company, for analysis of its tests.

“But the additional bias and skepticism is challenging to overcome,” Ms. Priego said.

The biggest blow came from a scientific adviser whom Ms. Priego said she had tried to recruit in 2019. The adviser took the meeting only to tell her that bringing technology into health care was doing a disservice to the industry, just like Theranos. It caused Ms. Priego to question whether she could hire the caliber of advisers she had hoped for.

“It was quite demoralizing,” she said. She has since recruited six advisers.

In July, Verge Genomics struck a three-year partnership with the pharmaceutical giant Eli Lilly to work on drugs for the treatment of amyotrophic lateral sclerosis, or A.L.S., Ms. Zhang said. The company also published a paper about its methods in a scientific journal last year and recruited a chief science officer this year.

It was a relief to have something to show to those who were doubtful, Ms. Zhang said.

“The most fragile part of the company is the earliest stage, when you have to buy into the people, the vision and the idea,” she said. Reflecting on Ms. Holmes and Theranos, she added, “It’s where these types of associations can be really harmful and curtail potential.”

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