You should group founders with the engineers and grad students rather than with the VCs. We have to figure out a market opportunity and a product to fit it, seed that ourselves, eat ramen, pitch it, recruit for it and then make it and sell it. We do all that for well below market rate wages for a chance a big return. Moreover, founders get common stock, same as engineers.
VCs get a management fee and a carry. They also invest some money into the fund. Their management fee de-risks them entirely.
You can't group VCs and founders on one side and engineers on the other. It just doesn't make sense.
Arguably the most financially successful founders are marketing-led, not technology-led. And some are perfectly happy to set up low-to-zero prospect companies, raise millions through networking and confidence, spend the millions with a good chunk going on their own salary/expenses, apologise to everyone in a punchy yet apparently humble post-mortem when the idea fails, and then do it all again.
In reality startup land is a scammer's paradise on all sides. Some people knowingly run a con, some are delusional, some are sincere but unlucky and/or lacking the skills/contacts/presentation to make a good idea work.
All of the above can get funding, especially in boom times. So there's surprisingly little pressure to build an ethical, product-focussed, engineer-friendly, stable business with lasting potential, and plenty of reward for not doing so.
It shouldn't be a surprise if there are people who take the bait - on any of the possible sides.
VCs get a management fee and a carry. They also invest some money into the fund. Their management fee de-risks them entirely.
You can't group VCs and founders on one side and engineers on the other. It just doesn't make sense.