The problem with the VC model is that : - there is little to no oversight - startup accounting is very basic, nobody really checks deeply how funds are spent - investors have almost no decision rights - investors play a numbers game and focus on their winners, so they have no time or incentive to bother you if you are slow-rugging People say creating a startup is risky, but when capital is abundant, it might actually be the least risky thing you can do. Once you've raised money, the ways to reward yourself are endless: - pay yourself a good salary and bonuses - use company funds to travel and stay in nice hotels - rent an office you own back to your own company - pay other companies you own as "contractors fees" And if the company fails, not only have you paid yourself well, but it even looks good on your resume since you've been a "founder" and a "risk taker". The VC model relies heavily on founders being ethical. This is an important assumption for this model to work. It works well during normal markets phases or when a sector isn't too crowded. But during a bull market, when anyone can raise millions, EV for investors drop sharply, and might even be negative.