A companion paper from the University of Toronto examined 654 fraud cases against US VC-backed startups across the same period, finding that startups launched during overheated markets with weak oversight and investor due diligence are 19% more likely to later commit fraud. It begins with surface façading, in which founders exaggerate how well the company is performing. The University of Toronto paper found that startups controlled by founder-dominated boards were twice as likely to commit fraud as those with investor-controlled or shared boards. It also found little evidence that fraud allegations prevent founders from raising funding for subsequent startups, even when those allegations received significant media coverage. "New investors and the broader VC market do not penalise past misconduct," the paper concluded.