Skip to content
Search

Latest Stories

Top Stories

High-tech founds need not sacrifice the moral high ground to achieve success

Sam Bankman-Fried

FTX's Sam Bankman-Fried showed what can happen when a high-tech entrepreneur does not practice good governance.

Gotham/GC Images via Getty Images

Pruthi is an associate professor of entrepreneurship at San Jose State University. She is also the lead author of “ Global Entrepreneurship and Innovation ” and a public voices fellow with The OpEd Project.

Sam Bankman-Fried, co-founder and former CEO of the cryptocurrency exchange FTX, was convicted in November on seven criminal counts after a month-long trial following the company’s collapse last year. Specifically, Bankman-Fried was convicted of forging financial statements to steal $10 billion deposited by customers in FTX so he could finance political contributions, venture capital investments and luxury real estate purchases.

His misconduct is not to be confused with the mistakes early-stage founders are prone to making. Ethical and responsible governance based on accountability to stakeholders and transparency of information is the hallmark of a liberal and democratic civil society and political system. Yet, in this age of rapidly growing high-tech start-ups, inadvertent breaches of corporate governance are likely to become more rampant unless founders understand the importance of full disclosure and take the lead in ensuring compliance with the ethical and legal code.


The liabilities of newness and smallness along with high personal investments of time, money and energy present difficult trade-offs at critical junctures in the lives of new ventures. Founders’ relative lack of awareness of the law coupled with pressures from stakeholders including co-founders, competitors, investors, governments and even their own families, make them especially vulnerable to ethical and legal misconduct.

The challenge of sudden growth, coupled with pressing capacity constraints, often causes burnout leading to a possible faux pas. Bankman-Fried worked more than 10 hours a day during the 2021 bull market, overseeing several parts of the company. FTX’s difficulties of opening a bank account and its reliance on Alameda Research, another of Bankman-Fried’s companies, to deposit funds are well known. While these operational gaffes may serve as warning signs to other start-ups of the dangers of the lack of attention, clearly it was far more than just negligence in the case of Bankman-Fried.

Safeguarding against misconduct is important to avoid heavy penalties and the loss of credibility – but it can even threaten entrepreneurial firms’ very existence in the extreme. Theranos, a private healthcare and life sciences company based in Palo Alto, California, is a case in point. According to the U.S. Attorney's Office, co-founder Elizabeth Holmes defrauded doctors, patients, and investors by making false claims about her company’s ability to provide accurate and reliable blood tests and results. Once a rising icon of success, Holmes was convicted in 2022 and sentenced to 11 years in prison for her actions.

Early-stage ventures are not the sole violators of the ethical and legal code; their more established counterparts are as guilty. Elon Musk’s electric vehicle maker, Tesla, has been fined for air quality violations, criticized for alleged child labor involvement in its supply chain, and disproportionate director’s pay and poor tax conduct, and sued for widespread and ongoing racial abuse of its Black employees at one of its manufacturing plants. More recently, the Federal Trade Commission and 17 state attorneys general sued Jeff Bezos’ Amazon for using unfair strategies to stop rivals and sellers from lowering their prices and maintaining monopoly power. Amazon allegedly made $1 billion by using a secret algorithm to raise its prices while still staying lower than its competitors.

To say that dealing with governance in entrepreneurial firms has been sidestepped would be misleading. While state agencies work tirelessly to ensure compliance with the law, fast-growing start-ups draw inspiration from their publicly listed counterparts to train employees and institute written codes of conduct. Yet formal mechanisms have not prevented companies from violating the very principles they have espoused.

Google’s famous “Don’t Be Evil” tagline did not deter co-founders Sergey Brin and Larry Page from partnering with the Chinese government to sell Google Analytics in that country despite the government previously imposing strict censorship requirements on Google’s search engine technology. No surprise that the “Don’t be Evil” stand has since gone missing from Google’s Code of Conduct.

The question of reawakening the consciousness of the entrepreneurial firm remains. The onus is on the individual founder to promote a strong ethical culture and lead by example. Creating and sustaining flat, non-hierarchical organizations, and building trust, transparency, and open communication with stakeholders are informal safeguards that founders can usefully combine with more formal mechanisms to ensure accountability. Exponential growth of the entrepreneurial firm need not come at the expense of compromising integrity so long as the conscientious founder is truly serious about treading the moral high ground.

Read More

Tariff ‘Mission Accomplished’ Hype Is Just That

In an aerial view, a container ship arrives at the Port of Oakland on Aug. 1, 2025, in Oakland, California.

Justin Sullivan/Getty Images/TNS

Tariff ‘Mission Accomplished’ Hype Is Just That

On May 1, 2003, George W. Bush announced, “Major combat operations in Iraq have ended.” He was standing below a giant banner that read, “Mission Accomplished.” At the risk of inviting charges of understatement, subsequent events didn’t cooperate. But it took a while for that to be widely accepted.

We’re in a similar place when it comes to President Trump’s experiment with a new global trading order.

Keep ReadingShow less
Back to School Shopping? Expect Higher Prices, “Invisible” to the Consumer

AI-driven "surveillance pricing" hides the price increases from stressed-out parents.

Getty Images, Isabel Pavia

Back to School Shopping? Expect Higher Prices, “Invisible” to the Consumer

For families with school children, the summer is coming to a close, and it’s time to start thinking about—school shopping! New clothes, shoes, daypacks, and school supplies are topmost of mind, making sure your little Einsteins and Rembrandts are ready to take on the new school year.

But this year, it’s coming with a twist—not only are prices higher in the stores and online, but the price increases are seemingly “invisible” due to deceptive uses of new technologies and what is known as “surveillance pricing.”

Keep ReadingShow less
Celebrating National Black Business Month

National Black Business Month is about correcting an imbalance and recognizing that supporting Black-owned businesses is suitable for everyone.

Getty Images, Tara Moore

Celebrating National Black Business Month

Every August, National Black Business Month rolls around, and for a few weeks, social media lights up with hashtags and well-meaning posts about supporting Black-owned businesses. You'll see lists pop up—restaurants, bookstores, clothing lines—all run by Black entrepreneurs. Maybe your favorite coffee shop puts up a sign, or a big brand launches a campaign. But once the month ends, the noise fades, and for many, it's back to business as usual.

This cycle is familiar. It's easy to mistake visibility for progress or to think that a single purchase is enough. But National Black Business Month is meant to be more than a fleeting moment of recognition. It's a moment to interrogate the systems that got us here and to put our money—and our intent—where our mouths are. In a better world, Black business success would be a given, not a cause for annual celebration.

Keep ReadingShow less
How Abnormal Are the Revisions in This Month’s Jobs Report?

Seasonally adjusted data. Graph excludes March to August 2020, initial months of the COVID-19 pandemic, when the reported jobs numbers were especially volatile. Shows difference between the preliminary estimate and the final revision for each month. Includes initial revision for June 2025 (BLS often issues a second revision).

How Abnormal Are the Revisions in This Month’s Jobs Report?

On Friday, President Trump announced that he was firing Erika McEntarfer, the head of the Bureau of Labor Statistics. Earlier that day the BLS had issued its monthly national jobs report, which showed lackluster growth in employment, and a slight uptick in the unemployment rate.

The report showed a relatively small increase in employment for July: +73,000 nonfarm payroll jobs. The BLS also included revisions to the preliminary jobs numbers reported earlier, stating: “Revisions for May and June were larger than normal. The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000, and the change for June was revised down by 133,000, from +147,000 to +14,000.”

Keep ReadingShow less