The Elizabeth Holmes trial left the entire startup industry on the edge of its seat, waiting for a determination on whether the founder of a now-defunct blood testing startup that had raised nearly $1 billion in funding would face a prison sentence for misleading investors and allegedly risking the health of thousands.

The trial, which went on for nearly four months, was the most high-profile case involving fraud charges against a Silicon Valley startup founder. Holmes, who was ultimately found guilty of four counts of misleading investors in early January, now faces a prison sentence of up to 20 years.

But the most shocking thing about Theranos? Nearly half of private market investors say it wasn’t all that unusual.

Approximately 48% of investors or dealmakers don’t think that the Theranos-Holmes scandal was an outlier in the industry, according to a 2022 Semaphore survey that anonymously polled more than 500 venture capitalists, private equity investors, investment bankers, and others.

“Theranos is the tip of the iceberg,” one anonymous respondent wrote. “There are hundreds of VC funded startups that are illegitimate fake hacks.”

Or another investor: “She got caught. I’ve worked in Silicon Valley since 1982—lots of undetected fraud through the years.”

These comments point to the dark side of an industry that has sometimes made a reputation by stretching the truth to attract investors and entice new customers. A slew of scandals have piled up amid a “fake it till you make it” culture that has run rampant, historically with few consequences. Founders including Ozy Media’s Carlos Watson or WeWork’s Adam Neumann have been accused of stretching the truth or the numbers to make their companies sound more attractive to investors.

Of course, this isn’t a reflection of all startups, and more than half of survey respondents say Theranos was, indeed, unusual. While startups may be prone to exaggeration or choosing facts and data selectively, Theranos was abnormal in that it took it too far by outright lying or fabricating information. “Holmes purposely and knowingly lied repeatedly, which I believe to be ‘outlier’ behavior and certainly not the norm,” one person stated.

Quipped another about Silicon Valley: “Hubris is always in fashion.”