Investors aren't dumb. What does Ivy gain in this trade by just raising a lot of money and running it poorly?

You think he can raise a huge round and just decide to pay himself $20m a year?

Capital is not a moat. There are entire industries (VC, PE, Banks, etc) that are looking to write checks. Nothing would make them happier than to give you money, under the condition that there is significant upside (more VC) or assets (PE, Banks) and you commit to doing the hard work for very little pay.

This is actually how the world works.

the world doesnt work like an efficient machine, and capital is far more of a moat than people want to admit. these "founders" are more like professional managers from the same backgrounds as the investors

there is alot of beta involved, i.e. put 10M into payroll startup xyz, expect some rate of return.

Assuming he doesn’t completely shit the bed he can spin any mediocre tenure into a great success and now he has experience running a company.

> Investors aren't dumb.

They are not dumb, just incompetent in the domains where they invest the money. And surrounded by yes-men because they are the ones writing the checks.