[john_moscow]

Could it have been a way of "privatizing" the institutional investors' funds? Invest a few mil in a startup, then spend a chunk of it on hefty consultancy fees to a company conveniently owned by the fund manager's wife and another chunk to the CEO's best friend's firm.

I'm wondering if the investment funds and startups provide enough transparency to the people whos money is actually invested to detect such schemes.

[bartread]

That's an interesting thought although in the case I was talking about all I can say, sadly, is I don't know. As outsiders we certainly didn't have any visibility. I suppose - working for different companies, mind - I've encountered enough of the whiff of low grade nepotism to imagine that on a larger scale that kind of thing does go on from time to time.